BittrexThe United States Securities and Exchange Commission (SEC) has recently revealed an agreement reached with the prominent cryptocurrency trading platform Bittrex, as well as its co-founder and former CEO, William Shihara. This agreement comes as a response to allegations of operating an unregistered exchange, a violation of federal regulations.
The SEC, in an official announcement on August 10th, stated that both Bittrex and Bittrex Global, its associated entity, have consented to a substantial settlement totaling $24 million to resolve the legal dispute with the federal regulatory body. This settlement is comprised of different components, including $14.4 million in disgorgement, $4 million in prejudgment interest, and $5.6 million in civil penalties. However, it’s important to note that the settlement’s finalization is contingent upon approval by a court.
The underlying issue that prompted this legal action revolves around the alleged actions of Bittrex. The SEC has accused the platform of collaborating with token issuers over an extended period, with the intention of removing any indications that the tokens they offered could be classified as investment contracts. This strategic move was seemingly aimed at circumventing the regulations set forth by federal securities laws.
Bittrex vs SEC
Gurbir Grewal, the enforcement director at the SEC, has emphasized the significance of this settlement, highlighting that mere alterations in labels or descriptions cannot absolve parties from legal accountability. What holds paramount importance is the genuine economic nature of these offerings.
The formal complaint lodged by the SEC back in April put forward allegations that the exchange, under the leadership of Shihara, effectively ran an unregistered national securities exchange. Moreover, the complaint extended to include accusations of the company functioning as a broker and clearing agency, all without proper registration. The enforcement body did not limit its actions solely to Bittrex, as it also initiated a separate enforcement action specifically targeting Bittrex Global. This action pertained to the operation of a singular shared order book, an aspect that raised concerns in conjunction with Bittrex’s activities.
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