The U.S. Securities and Exchange Commission (SEC) on Monday sued crypto platform Bittrex over allegations of non-compliance. The complaint follows a notification from Wells in March 2023, after which the crypto exchange announced it was ending US operations. However, it wasn’t until Sunday that reports emerged on the Wells message leading up to the exchange’s decision to exit the message. This move adds to the US SEC’s growing list of crypto companies under its radar.
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In its complaint, the agency also sued Bittrex co-founder William Shihara for operating “an unregistered national stock exchange, broker and clearing house.” The SEC also sued Bittrex’s foreign subsidiary, Bittrex Global GmbH, for failing to register as a national stock exchange due to its management of a single shared order book with Bittrex.
Gurbir Grewal, director of the SEC’s enforcement division, alleged that Bittrex repeatedly chose profit over investor protection. He added in the complaint that the exchange hinged on circumventing federal securities laws’ registration requirements. Interestingly, the agency said it wanted to send a message to other crypto players with this complaint.
Today’s action not only holds Bittrex accountable for misconduct that we claim puts investors at risk, but should also send a message to other non-compliant crypto market intermediaries to follow federal securities laws or be held accountable for their violations.”
The regulator said CEO Shihara made sure to remove “problematic statements” from the public domain to prevent agencies from investigating the aspect of selling crypto assets as securities. The deleted statements included terms such as “price forecast” and “earnings forecast,” it added. The complaint further alleged that Bittrex facilitated asset trading for tokens offered and sold as securities.
The Bittrex trading page displays price changes, as do registered trading platforms that are allowed to trade securities. The Bittrex platform does not restrict buyers of crypto assets based on the reason for purchase — consumption purposes rather than perceived non-investment purposes, it explained. The complaint listed six cryptocurrencies — Algorand (ALGO), OmiseGO (OMG), Dash (DASH), TokenCard (TKN), I-House Token (IHT), and NAGA (NGC) — saying they were available for trading on the platform in the form of securities.
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Anvesh reports major developments around crypto adoption and trading opportunities. He has been associated with the industry since 2016 and is now a strong advocate for decentralized technologies. Anvesh is currently based in India. Contact him at [email protected]
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