Following reports revealing that cryptocurrency exchange Bittrex received a Wells Notice from the U.S. Securities and Exchange Commission (SEC), securities regulators on April 17 charged Bittrex and its CEO with “unregistered operating an exchange, broker, or clearinghouse.”
Following the Wells notice, the SEC charged Bittrex with federal violations
On Monday, the U.S. Securities and Exchange Commission (SEC) charged another cryptocurrency exchange, accusingtrading platform Bittrex of operating an “unregistered national securities exchange, broker, and clearinghouse.”Since 2014, Bittrex has “offered and sold” crypto assets, the SEC’s complaint was filed in the U.S. District Court for the Western District of Washington.
The SEC further alleges that Bittrex Global should have registered an exchange, and the regulator alleges that the two entities utilized a “shared order book.” The complaint also points out that Bittrex should have registered as a clearing agency and broker.” Bittrex “regularly engaged in the business of entering into transactions for the accounts of others in crypto assets offered and sold as securities,” the SEC complaint alleges.
“Today, we hold Bittrex accountable for its noncompliance,” SEC Chairman Gary Gensler wrote in a statement Monday. “Today’s action once again makes clear that the crypto market suffers from a lack of regulatory compliance, not a lack of regulatory clarity.” As alleged in our complaint, Bittrex and the issuers it worked with knew the rules that applied to them, but went to great lengths to circumvent them by instructing issuer applicants to “scrub” information indicating that a particular crypto asset was a security from the offering materials It took a long time.”
The SEC Chairman added:
In addition, Bittrex, as alleged, failed to register and comply with the U.S. securities laws as an exchange, broker-dealer, and clearing agency. The cosmetic changes do not alter the underlying economic reality of the Offering and Bittrex’s conduct.
The SEC’s complaintfollows the recent news that Bittrex received a Wells notice informing the cryptocurrency exchange of a possible enforcement action. Bittrex’s general counsel, David Maria, said the SEC will sue the company If it decides to do so, he told the Wall Street Journal, the exchange will contest the action in court unless the regulator “offers a reasonable settlement.” As of this writing, the SEC’s complaint does not offer a settlement, and the court filing states that “a jury trial (is) required.” In addition to cryptocurrency exchange Bittrex Global, its CEO William Hiroaki Shihara is also named in the suit.
What are your thoughts on the SEC’s latest enforcement action against Bittrex?
