In its latest crackdown on cryptocurrencies, the US Securities and Exchange Commission (SEC) sued Bittrex for violating securities laws, even though the exchange was actively liquidating its trading on USA
key takeaways
- The SEC alleges that Bittrex and its former CEO, Bill Shihara, operated a stock exchange, broker, and clearing agency without proper registration.
- The SEC alleges that Bittrex and Shihara knowingly asked coin issuers to remove statements from their offerings that might suggest those coins were securities.
- Bittrex previously announced the winding down of its US operations due to regulatory uncertainty.
The SEC Complaint Against Bittrex
According to the SEC complaint, Bittrex and its former CEO Bill Shihara knowingly circumvented the registration requirements of federal securities laws by instructing crypto asset issuers to remove certain statements from their offering materials that would indicate they were securities. . Bittrex also earned at least $1.3 billion in revenue from transaction fees from investors, including US investors, without registering or complying with US securities laws.
Last month, Bittrex Announced a planned shutdown of its US operations by the end of April, citing concerns related to regulatory uncertainty.
This lawsuit is part of the SEC's ongoing efforts to protect investors and ensure compliance in the crypto markets. SEC Chairman Gary Gensler said that "crypto markets suffer from a lack of regulatory compliance, not a lack of regulatory clarity" and "cosmetic alterations did nothing to change the underlying economic realities of Bittrex's offerings and conduct." ".
"Bittrex repeatedly chose profits over investor protection," said SEC Chief Compliance Officer Gurbir S. Grewal.
Bittrex is not the only exchange with legal challenges from the SEC. US-based cryptocurrency exchange Coinbase has revealed that it received a โNotice from Wells,โ indicating that they could soon face SEC enforcement action as well.
The SEC has come under fire for its recent enforcement actions against crypto companies and the crypto community says it needs more clarity on the rules. Gensler has repeatedly said that many crypto trading platforms fit the current definition of an exchange and must comply with securities laws.
The regulator is also seeking comments to amend the definition of exchanges to bring crypto exchanges more robustly under its purview.
Gensler faces congressional rejection
Over the weekend, this criticism came to a head when US Congressman Warren Davidson (R-OH) shared his intention to introduce legislation to remove the SEC chairman from office.
Gensler has also faced disagreements within his own department, particularly from SEC Commissioner Hester Pierce, who has opposed redefining an exchange to more directly include various aspects of the crypto market, specifically in the areas of decentralized finance (DeFi). ).
