Bittrex Agrees to Pay $24 Million to Settle SEC Charges
Bankrupt crypto trading platform Bittrex will pay $24 million to settle U.S. Securities and Exchange Commission (SEC) charges for running an unlicensed exchange, broker, and clearing agency.
Key Takeaways
- Bittrex’s settlement includes $14.4 million in disgorgement, $4 million in prejudgment interest, and $5.6 million in civil penalties.
- The settlement is pending court approval and involves Bittrex and Bittrex Global.
- Bittrex co-founder and ex-CEO William Shihara settled without admitting or denying the SEC’s allegations.
Bittrex’s Legal Dispute Resolution
Bittrex and Bittrex Global have agreed to pay $14.4 million in disgorgement, $4 million in prejudgment interest, and $5.6 million in civil penalties to resolve the legal dispute with the U.S. regulator. The settlement awaits court approval. Bittrex Global is the international branch of the Bittrex brand.
Shihara, who departed Bittrex in 2019, expressed that the settlement was a positive outcome. A Bittrex spokesperson mentioned that the company was pleased with the case’s resolution, as per Reuters.
SEC’s Stance on the Settlement
The SEC had accused Bittrex of operating an unlicensed national securities exchange, broker, and clearing agency since 2014. The regulator claimed that Bittrex collaborated with token issuers to remove indications that their offerings constituted investment contracts, aiming to circumvent federal securities laws.
SEC’s enforcement director, Gurbir Grewal, emphasized that changing labels or descriptions does not absolve liability; what matters is the economic essence of the offerings.
SEC Continues Crypto Industry Crackdown
The SEC has had a significant impact on the crypto sector this year through various enforcement actions. Besides Bittrex, major cryptocurrency exchanges like Binance, Coinbase, and Kraken have also faced regulatory scrutiny.
Notably, the SEC plans to challenge a court ruling regarding XRP’s status as a security in the Ripple Labs case. Additionally, crypto advocate Richard Heart is facing SEC charges related to his HEX crypto token activities.
Despite the regulatory landscape, bitcoin has seen a positive performance, climbing approximately 78% since the beginning of the year.
