Bittrex Settles SEC Charges for $24 Million
Bankrupt crypto trading platform Bittrex, which ceased U.S. operations earlier this year, has agreed to pay $24 million to settle charges brought by the U.S. Securities and Exchange Commission (SEC).
Key Takeaways
- Bittrex to pay $24 million in disgorgement, prejudgment interest, and civil penalties.
- Settlement pending court approval.
- SEC alleges Bittrex operated an unregistered national securities exchange, broker, and clearing agency since 2014.
Details of the Settlement
Bittrex and Bittrex Global will 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. Bittrex Global represents the international arm of the Bittrex brand.
Bittrex and its co-founder and ex-CEO William Shihara settled without admitting or denying the SEC’s allegations. The SEC originally alleged in April Bittrex and Shihara operated an unregistered national securities exchange, broker, and clearing agency since 2014.
The regulator also accused Bittrex of working with token issuers to “scrub” their online statements of any signs they were investment contracts in order to evade federal securities laws.
SEC enforcement director Gurbir Grewal said the settlement shows “you cannot escape liability by simply changing labels or altering descriptions because what matters is the economic realities of those offerings.”
Shihara, who left Bittrex in 2019, said in a statement that the settlement was a “good outcome,” and a Bittrex spokesperson said the firm was “delighted” with the outcome of the case, Reuters reported.
SEC’s Aggressive Crypto Crackdown Likely To Continue
This year has seen a surge in SEC activity within the crypto industry. In addition to Bittrex, exchanges like Binance, Coinbase, and Kraken have also faced enforcement actions from the financial regulator.
Furthermore, the SEC plans to appeal the decision in their case against Ripple Labs where a federal judge ruled that XRP is not a security. Recently, crypto promoter Richard Heart was charged by the SEC for activities related to his HEX crypto token.
Despite these regulatory actions, bitcoin has seen a rise of approximately 78% since the beginning of the year.
