Bittrex Agrees to Pay $24M to Settle with SEC for Failing to Register as National Securities Exchange

The US SEC filed a complaint against Bittrex on April 17 with the US District Court for the Western District of Washington alleging the exchange listed unregistered securities.

The United States Securities and Exchange Commission (SEC) counted another win against the cryptocurrency market on Thursday after digital asset exchange Bittrex agreed on a $24 million settlement for allegedly listing unregistered securities in the name of crypto assets trading. However, the SEC noted that the defendants agreed on the settlement under the condition that the former neither admits nor denies the allegations. Nonetheless, the SEC counted it as a win after a recent blow in the Ripple case, which the agency intends to appeal.

SEC vs Bittrex Litigation

Earlier this year, the United States SEC filed a complaint against the Bittrex crypto exchange and its former CEO William Shihara for allegedly operating an unregistered national securities exchange, broker, and clearing agency. The SEC highlighted that Bittrex has earned at least $1.3 billion from 2017 through 2022 by charging transaction fees from investors.

The SEC further complained that Bittrex and Shihara, who was the company’s CEO from 2014 to 2019, coordinated with crypto issuers to first delete from public channels certain problematic statements that the exchange believed would lead to regulatory scrutiny. As a result, the SEC argued that the exchange chose profits over investor protection.

Having been cornered without further argument based on existing laws, Bittrex and Bittrex Global agreed to pay a joint disgorgement fee of about $14.4 million, prejudgment interest of $4 million, and a civil penalty of $5.6 million, thereby bringing the total penalty to about $24 million. Notably, the settlement is subject to the court’s approval

“Today’s settlement makes clear that you cannot escape liability by simply changing labels or altering descriptions because what matters is the economic realities of those offerings. I am grateful to the SEC staff for aggressively pursuing non-compliance in the crypto industry, resolving this matter, and bringing additional relief to harmed investors,” Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, noted.

The US SEC has already filed similar complaints against several crypto exchanges including Binance US and also Coinbase Global, Inc. (NASDAQ: COIN). However, the SEC has been accused of overstepping its mandate as some argue that the crypto market is not under its jurisdiction.

Bigger Picture

The cryptocurrency market in the United States is expected to experience heavy regulatory onslaught from several agencies including the Fed, SEC, CFTC, FDIC, and OCC. Notably, Congress too has made swift progress in regulating the crypto industry more so the stablecoins market in a bid to ensure a safe adoption of the digital dollar, which in turn helps the greenback retain its status as the global reserve currency.

Blockchain News, Cryptocurrency News, News

Steve Muchoki

Let’s talk crypto, Metaverse, NFTs, CeDeFi, and Stocks, and focus on multi-chain as the future of blockchain technology.
Let us all WIN!

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *