Bittrex Resolves SEC Matter, Agrees To $24 Million Settlement
The Securities and Exchange Commission settled with bankrupt cryptocurrency exchange Bittrex and its CEO for $24 million after accusing it of operating as an unregistered exchange in April.
As per a court submission on Thursday, the exchange, its overseas affiliate, and former CEO William Shihara did not acknowledge or reject accusations.
The SEC announced in a statement that Bittrex Global GmbH, a foreign affiliate of Bittrex, had agreed to settle allegations that it had neglected to register as a national securities exchange.
To circumvent federal securities regulations, Bittrex worked with token issuers for years to “scrub” their online statements of any indication that they were investment contracts. According to Gurbir S. Grewal, director of the SEC’s enforcement division, they fell short.
“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,” he continued.
In a statement sent through email, Shihara termed the settlement “a good outcome.”
“It’s vital that our country strikes a balance between fostering innovation, encouraging entrepreneurs, and the need to protect consumers, and I hope today’s proposed settlement helps move that forward,” Shihara said.
Bittrex revealed in May that its assets and liabilities were valued at approximately 500millionto1 billion each, leading to its subsequent filing for Chapter 11 bankruptcy protection.
Enforcement Of Transactions
Bittrex announced its departure from the United States earlier in March.
According to data from The Block, the company had a market share of USD support of about 23% at the beginning of 2018. It was one of the biggest exchanges in the U.S.
According to the SEC, cryptocurrency exchanges now need to register with the government, which has tightened down on them. The organization filed charges against Coinbase in June for conducting business as an unlicensed exchange.
SEC Chair Gary Gensler has warned about noncompliance in the cryptocurrency sector.
“The platforms themselves, where trading is occurring of various crypto tokens, though some of it comes under the securities laws; currently they’re not necessarily compliant with those time-tested protections against fraud and manipulation,” In an interview with Bloomberg last month, Gensler stated.
