The U.S. Securities and Exchange Commission (SEC) accused the cryptocurrency exchange Bittrex of operating as an unregistered exchange, broker, and clearing agency.
Crypto exchange Bittrex faced enforcement action from the SEC. Specifically, the regulator filed four Exchange Act charges against the company and its Co-Founder and former CEO William Shihara in the U.S. District Court for the Western District of Washington.
In the complaint, the SEC alleges that Naga (NGC), OMG Network (OMG), Algorand (ALGO), Monolith (TKN), Dash (DASH), and IHT Real Estate Protocol (IHT) tokens are unregistered securities. The SEC is pushing for a jury trial as soon as possible. Among the regulator’s demands are property forfeiture, fines, and injunctive relief.
According to David Maria, General Counsel for Bittrex, the company received a Wells Notice from the regulator back in March, but at that time the exchange had already begun the process of winding down its operations in the United States. Bittrex representatives announced that the company would cease operations in the country from April 30, 2023, due to “continued regulatory uncertainty.”
Bittrex representatives claim in their statement regarding the SEC’s actions that they’ve repeatedly contacted the agency for guidance to operate “within the parameters of the law” of the U.S. However, the SEC never provided clear rules for the crypto exchange, instead now accusing the company of breaking laws. According to David Maria, after receiving the Wells Notice, Bittrex’s attorneys asked regulators to name what specific assets on the platform the agency considered securities in order to delist them but never received a response.
According to Gurbir Grewal, Director of the SEC’s Division of Enforcement, Bittrex’s activities “put investors at risk,” and the company should be liable “for misconduct.” He added that the agency’s actions should become “a message to other non-compliant crypto market intermediaries.”
U.S. politicians, blockchain industry representatives, and crypto community members accused the SEC of exceeding its authority, arguing that the regulator’s actions threaten the DeFi sector in the United States. Recently, it was also reported that Gary Gensler could be fired as Chairman of the agency “to correct a long series of abuses” related to the crypto market regulation.
