- Bittrex opts for settlement in enforcement suit with SEC.
- Bittrex has continued to receive hit after hit, even amidst its bankruptcy filing.
The SEC has finally settled a case it filed in April against the crypto trading platform, Bittrex, and its co-founder and CEO at the time, William Shihara, with claims that the trading platform and its CEO were operating an unregistered exchange and also filed a complaint against Bittrex global itself.
On August 10, U.S. Securities and Exchange Commission reported that Bittrex and Bittrex Global had agreed to settle and pay $14.4 million in disgorgement (the repayment of ill-gotten funds), $4 million in prejudgment interest and an added $5.6 million for civil penalties to settle the legal dispute the crypto trading platform has with the federal regulator. However, this settlement reached is still subject to court approval.
Securities and Exchange Commission enforcement director, Gubir Grewal, stated, “For Years, Bittrex has worked with token issuers to clean up their online reports of any indication of them being investment contracts in a bid to evade federal securities laws.”
He also added that the settlement reached by Bittrex has made it clear that it is impossible to escape liabilities by altering or using different labels or descriptions because the vital element is the economic realities of said offerings.
In a commentary made to Cointelegraph, the co-founder of Bittrex and Bittrex Global suggested that the settlement reached by Bittrex and Bittrex Global was a good outcome, adding that he believes the United States needed a chance to strike a balance between raising innovation, fostering entrepreneurs and the importance of keeping the consumers of these innovations protected.
William Shihara retained his position as the CEO of Bittrex from 2014, when it was founded, till 2019, when he exited the trading platform. The complaint made by the Securities and exchange commission in April included claims of William and Bittrex operating an unregistered national securities exchange, broker, and clearing agency.
The SEC also filed a separate suit against Bittrex Global for allegedly operating a single shared order book with Bittrex.
However, trouble with the Securities and Exchange Commission is not the only one Bittrex has faced, as it received enforcement action in October 2022 from the U.S. Department of the Treasury’s Office of Foreign Assets Control and Financial Crimes Enforcement Network, with it ending in the trading platform agreeing to a $29million settlement. Just before it was hit with enforcement actions by the SEC, the exchange had announced its plan to shut down operations in the United States in April. According to them, the move was being made due to the strict regulatory environment in the U.S.
Bittrex filed for Chapter 11 bankruptcy in May.
Conclusion
The SEC has pending cases with multiple crypto firms, including Binance, Ripple Labs, Terraform Labs, and Coinbase. The Securities and Exchange Commission’s actions have opened the U.S. to criticism over their harsh regulatory environment, with U.S. lawmakers also criticizing the agency for their untoward regulatory enforcement rules towards the crypto market.
