Cryptocurrency exchange Bittrex is challenging a lawsuit filed against it by the U.S. Securities and Exchange Commission (SEC) in April. The company’s attorneys are relying on a similar statement from Coinbase’s lawyers and are demanding that the lawsuit be dismissed due to the regulator’s lack of legal authority to regulate the crypto market.
Cryptocurrency exchange Bittrex filed a motion in the U.S. District Court for the Western District of Washington to dismiss the Securities and Exchange Commission’s lawsuit, arguing that the SEC has no authority to regulate cryptocurrency assets as securities because it is not mandated by U.S. law.
Bittrex’s attorneys in the motion frame their arguments similarly to those of Coinbase, which requested that the SEC’s lawsuit be dismissed last week. First and foremost, the company’s representatives emphasize that the SEC has no direct authorization from Congress to act in regulating the crypto market processes. Bittrex lawyers also point out that it is simply impossible to consider cryptocurrencies as securities after their initial sale in secondary markets.
In addition, Bittrex’s lawyers pointed out that the SEC should have warned the cryptocurrency exchange that its activities were illegal before filing a lawsuit in court. However, the regulator did not do so because it needed the legal authority. Thus, Bittrex representatives seek to emphasize the need to define the regulatory framework for the cryptocurrency market clearly. In their opinion, cryptocurrencies traded on the secondary market should be categorized as commodities or other classes of digital assets.
Recall that the SEC charged Bittrex and its co-founder Bill Shihara with operating as an unregistered securities exchange, after which the company filed for bankruptcy.
