The SEC Goes After Bittrex
The United States Securities and Exchange Commission (SEC) has leveled some strong accusations against the crypto asset trading platform Bittrex and its co-founder and former CEO William Shihara. They’ve been charged for operating as an unregistered national securities exchange, broker, and clearing agency. As if that wasn’t enough, there’s also a separate charge against Bittrex Global. In the courtroom showdown, they’ll face four counts of Exchange Act violations right in the U.S. District Court for the Western District of Washington.
What’s on the Chopping Block?
Among the charges, the SEC claims that several tokens—OMG, Dash (DASH), Algorand (ALGO), Monolith (TKN), Naga (NGC), and IHT Real Estate Protocol (IHT)—traded on Bittrex are in fact securities. This declaration has raised a few eyebrows, stirring up skepticism about the SEC’s timing. Historically, the agency has been accused of using “regulation by enforcement,” where they come out swinging with these claims only at the time of filing complaints.
The Deletion Dilemma
The plot thickens! The SEC has also alleged that Bittrex and Shihara advised clients to clean house by deleting what they called “problematic statements.” Talk about a digital spring cleaning! Their complaint is seeking disgorgement of profits, imposition of penalties, and permanent injunctions in the upcoming jury trial. According to Gurbir Grewal, SEC Enforcement Division Director, this move aims to send a clear message: play by the rules or face the consequences.
Bittrex’s Expectation and Response
Bittrex wasn’t blindsided by the SEC’s actions. They had received a Wells notice hinting at this impending storm back in March. They even announced their plans to shut down U.S. operations effective April 30, citing the challenging regulatory climate. A spokesperson for Bittrex expressed frustration, noting that, despite years of inquiries, the SEC had failed to clarify which digital assets they considered securities.
A Broader Regulatory Landscape
To add insult to injury, this isn’t Bittrex’s first brush with regulatory consequences. Back in October, they faced penalties from the U.S. Treasury’s Office of Foreign Assets Control and the Financial Crimes Enforcement Network for violating sanctions programs and the Bank Secrecy Act. It’s safe to say Bittrex has been quite the magnet for regulatory attention lately.
