After the report revealed that cryptocurrency exchange Bittrex had received a Wells notice from the US Securities and Exchange Commission (SEC), the securities regulator accused Bittrex and the company’s CEO on April 17 of “operating an unregistered exchange, broker and clearing agency.” “
Following the Wells notice, the SEC charges Bittrex with violating federal laws
On Monday, the US Securities and Exchange Commission (SEC) charged another cryptocurrency exchange, accusing trading platform Bittrex of operating “an unregistered national securities exchange, broker and clearing agency.” Since 2014, Bittrex has reportedly sold cryptoassets that were “offered and sold as securities.” The SEC’s complaint was filed in the US District Court for the Western District of Washington.
The SEC further argued that Bittrex Global should have registered the exchange, and the regulator alleges that the two entities utilized a “split order book.” The complaint also notes that Bittrex should have registered as a clearing agency and a broker. “[Bittrex] regularly engaged in the business of effecting transactions for others’ accounts in cryptoassets that were offered and sold as securities,” the SEC’s complaint insists.
“Today, we hold Bittrex accountable for non-compliance,” SEC Chairman Gary Gensler wrote in a statement on Monday. “Today’s action makes clear once again that the crypto markets suffer from a lack of regulatory compliance, not a lack of regulatory clarity.” As alleged in our complaint, Bittrex and issuers it worked with knew the rules that applied to them, but went to great lengths to avoid them by directing issuer applicants to “scrub” and provide material with information indicating that certain cryptoassets were securities. “
The SEC chairman added:
Further, Bittrex allegedly failed to register and comply with US securities laws as an exchange, broker-dealer and clearing agency. Cosmetic changes did nothing to change the underlying economic realities of the offerings and Bittrex’s behavior.
The SEC’s complaint follows the recent news that Bittrex received a Wells notice informing the cryptocurrency exchange of possible enforcement actions. Bittrex’s general counsel, David Maria, told the Wall Street Journal that if the SEC decided to sue the firm, the exchange would contest the action in court unless the regulator “put forward a reasonable settlement offer.” At the time of writing, the SEC’s complaint does not offer a settlement, and the lawsuit states a “jury trial [is] demanded.” In addition to the cryptocurrency exchange Bittrex Global, the company’s CEO, William Hiroaki Shihara, is also named in the case.
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accounts , Bittrex , broker , clearinghouse , complaint , court filing , crypto exchange , crypto markets , cryptocurrency , cryptocurrency exchange , cryptocurrency industry , David Maria , financial realities , enforcement , Gary Gensler , issuer-applicants , jury trial , lawsuit , offering , regulatory clarity , Regulatory Compliance , SEC , securities , securities laws , settlement offer , split order book , transactions , unregistered exchange , Wall Street Journal , well alert , William Hiroaki Shihara
What are your thoughts on the SEC’s latest enforcement action against Bittrex, and do you think it will lead to increased regulatory scrutiny in the cryptocurrency industry? Share your thoughts in the comments section below.
Jamie Redman
Jamie Redman is the news editor at Bitcoin.com News and a financial technology journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.
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