James Atkins
Editor
Editor
The US Securities and Exchange Commission (SEC) has taken legal action against crypto exchange Bittrex and its ex-CEO, William Shihara. Below are some key highlights:
Bittrex, which is one of the biggest and most longstanding cryptocurrency exchanges globally, has been sued by the Securities and Exchange Commission (SEC). It has also sued the company’s former CEO, William Shihara.
The SEC’s complaint claims that Bittrex violated securities law by offering tokens like DASH, OMG, and ALGO as securities; without registering them with the regulator. According to the SEC, these tokens were sold to retail investors who had no access to the SEC’s protections.
Bittrex has been accused by the SEC of illegally generating more than $1.3 billion in revenue between 2017 and 2022. By serving as a broker, exchange, and clearing agency for U.S. investors without properly registering with the Commission.
The complaint has been filed by SEC in the US District Court for the Western District of Washington.
Following the news from Bittrex, the cryptocurrency market traded lower on Monday morning. Bitcoin price dropped below $30,000, and Ethereum price was just over $2,080 at the time of writing. The total crypto market cap decreased by 2.9% to $1.3 trillion.
According to the SEC complaint, Bittrex has been unlawfully providing securities to users since 2014 without proper registration. The US regulator claims that Bittrex is an unregistered securities exchange, broker, and clearing agency.
Bittrex Global GmbH, the foreign affiliate of Bittrex, is also facing charges because it did not register its exchange operation; even though it shared an order book with Bittrex. The SEC claims that Bittrex should have registered as an exchange under the Exchange Act of 1934.
The SEC intends to obtain an injunction against Bittrex, as well as civil penalties and disgorgement. SEC is also seeking to prohibit the defendants from any further violations of the Securities Exchange Act in the future.
The complaint mentions several assets, including OMG Network (OMG), Dash (DASH), Algorand (ALGO), and TokenCard (TKN), which are referred to as securities. Additionally, the regulator flags MANA as one of the assets considered a “security” available for trading on the exchange.
In response, Bittrex has stated that it will cooperate with the SEC and is taking steps to ensure that its offering complies with regulations. The exchange has also noted that it believes these tokens are not securities but utility tokens and thus, do not require registration.
The SEC recently sues Bittrex, and this news follows shortly after the agency sends a Wells Notice to Coinbase. The lawsuit against Bittrex is part of a trend of increasing legal action taken against cryptocurrency companies.
Bittrex is a U.S.-based cryptocurrency exchange founded in 2014 which offers a wide range of trading options for users. To buy, sell and trade digital assets such as Bitcoin (BTC), Ethereum (ETH), Ripple (XRP) and other blockchain-based tokens.
At present, Bittrex is one of the most extensive crypto exchanges in the industry as it has listed over 190 cryptocurrencies.
The outcome of this case will no doubt have a major impact on the cryptocurrency industry and could set precedent; for how utility tokens are treated in the future.
It is yet to be seen what ultimate action the SEC will take against Bittrex. However, it will surely be closely watched by exchanges around the world.
I have been writing copy for blockchain-related projects since 2017. I understand the importance of being able to communicate clearly and effectively with both technical and non-technical audiences. By leveraging my understanding of the crypto industry trends, I can help increase adoption in this rapidly evolving landscape.
