Bittrex has been asking the SEC for clarity on which digital assets on the platform constitute a security, however, it has not received a response from the agency.
Seattle based crypto exchange bittrex is the latest to face the US Securities and Exchange Commission (seconds) Prosecution on charges of violation of federal laws. On Monday, April 17, the SEC charged crypto exchange Bittrex with co-founder William Shihara for operating an unregistered securities exchange, a clearing agency and a broker.
In a press release from the SEC on Monday, the securities regulator accused Bittrex of working with cryptocurrency issuers to “delete problematic statements” to avoid regulatory scrutiny. As a result, the SEC complaint seeks penalties, disgorgement and a permanent injunction against the defendants in a jury trial.
Commenting on the development, SEC Enforcement Director Gurbir Grewal said that the lawsuit against crypto exchange Bittrex will set an example for other non-compliant crypto market players. He couple,
“As described in our complaint, Bittrex’s business model was based on three things: circumventing the registration requirements of the federal securities laws; advising issuers of crypto asset securities to do so by making changes to their offering materials; and the combination of multiple market intermediary functions under one roof to maximize profits.
Today’s action not only holds Bittrex accountable for misconduct, which we allege put investors at risk, but also holds other non-compliant crypto market intermediaries accountable for complying with or violating federal securities laws. Message should also be sent.
Bittrex reaction and US exit plan
Last month in March 2023, crypto exchange Bittrex received a Well Notice from the SEC and was already anticipating a possible action. Shortly thereafter, crypto exchange Bittrex announced its plans to withdraw its operations from the US market, citing uncertainty in the US regulatory and economic environment.
Following yesterday’s development, crypto exchange Bittrex issued a statement:
“We are disappointed by the SEC’s decision to take enforcement action against Bittrex. For more than five years, […] The SEC will not report specific conduct that it thinks has violated federal securities laws. Specifically, on several occasions, we asked them to let us know which digital assets they view as securities on our platform, so that we can review and potentially remove them. He refused to do so.”
It further said that the SEC’s action could have a “chilling effect” on the crypto industry in the US. Now, the crypto industry is anticipating the SEC’s next action on crypto exchanges coinbase Which also got a Wales notice last month.
Bhushan is passionate about Fintech and has a good grasp of understanding the financial markets. His interest in economics and finance drew his attention to the newly emerging blockchain technology and cryptocurrency markets. He is in the process of continuous learning and keeps motivating himself by sharing his acquired knowledge. In his spare time he reads thriller fiction novels and occasionally explores his culinary skills.
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