The Securities and Exchange Commission (SEC) has signaled its intention to file another lawsuit against a heavyweight of the cryptocurrency industry, this time the Bittrex cryptocurrency exchange.

The exchange, which announced the shutdown of its US operations last month, received a Wells Notice from the SEC at the time alleging it had violated investor protection laws.

Why Bittrex is leaving the United States

As reported Per the Wall Street Journal, Bittrex general counsel David Maria said that SEC enforcement staff intended to recommend that the agency sue the company for investor protection violations.

Such violations included operating as an unregistered exchange, broker-dealer, and securities clearinghouse. According to Maria, the SEC and Bittrex were in talks to discuss a path to registration from the end of 2022. Unfortunately, the company was unable to figure out a way to do this without shutting down essentially all of its revenue-generating services.

The agency has been investigating Bittrex since 2017 and has issued multiple subpoenas against the exchange to look at how the company makes money and determine which assets to list. Last October, it was fined $53 million by the Treasury Department for having inadequate anti-money laundering controls.

On March 31, Bittex finally Announced that it would shut down operations in the US due to an “uneven competitive landscape” created by regulatory hurdles and a lack of clarity, making continued operations “no longer feasible.” Maria said that the company had already planned to shut down operations before receiving the Wells Notice from the SEC.

“The lack of regulatory clarity here results in substantial costs and no certainty about what can and cannot be offered,” he said.

The Nexo crypto lending platform was also forced to abandon operations in the United States last year after failing to find a way forward amid the “inconsistent and changing positions” of regulators in the country.

SEC VS Cryptocurrency Exchanges

Bittrex was one of the world’s largest cryptocurrency exchanges in 2017 before being later surpassed by Coinbase, Kraken, and Binance.

coin base received a Notice to Wells from the SEC last month for listing unregistered securities on its platform and failing to register its involvement as a service product with the agency. Kraken was fined $30 million in February for providing a similar service.

Binance was later defendant by the Commodity and Futures Trading Commission for facilitating commodity trading for clients within the United States, including Bitcoin and Ethereum, without proper records.

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