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RRUPDATES📍: ‘Illegal’ Actions Land Bittrex in Court Battle Against US Government Agency
Bittrex Charged..The Battle Lines Drawn
The R Roundup
April 19, 2023
RRUPDATES📍: ‘Illegal’ Actions Land Bittrex in Court Battle Against US Government Agency
On April 17th, 2023, Bittrex, a Delaware-based business that provides a digital asset trading platform, and its former CEO, Bill Shihara, were charged with violating federal securities laws.
According to the complaints filed in the U.S. District Court for the Western District of Washington, Bittrex has been accused of operating as an unregistered national securities exchange, broker, and clearing agency by the SEC.
The allegations suggest that Bittrex circumvented the registration requirements of federal securities laws, which may have exposed their investors to risks.
It didn’t end there. SEC insists that Bittrex promoted the trade of digital assets, knowing fully well that it wasn’t legally registered as a national securities exchange. Former CEO Bill Shihara is held responsible for this.
According to SEC’s allegations, Bittrex and Bill Shihara have been accused of serving as brokers, participating in illegal market manipulation, and overseeing clearing agencies without obtaining full recognition as a security under federal securities laws.
Between 2017 and 2022, Bittrex operated as a digital asset trading platform and reportedly earned over $1.3 billion in revenue from various sources, such as trading fees, gas fees, and other transactions involving the buying and selling of digital assets.
SEC Chair Gary Gensler doesn’t seem pleased as he states,
“Today’s action, yet again, makes plain that the crypto markets suffer from a lack of regulatory compliance, not a lack of regulatory clarity.” — Gary Gensler, SEC Chair
But the SEC’s lawsuit may have significant implications for Bittrex, its former CEO, and its million users scattered across the globe. SEC may demand disgorgement as legal penalties for alleged violations of federal securities laws.
Platform users may also face legal repercussions if found to have participated in unlawful trading activities.
As the case unfolds, Bittrex must fully comply with SEC and all applicable laws and regulations, even if it means taking the necessary steps to strengthen its compliance and security protocols for the sake of users and investors.
Though SEC’s charges against Bittrex and its former CEO highlight the need for regulatory compliance in the crypto market, this development is significant for the industry as it marks one of the first meaningful regulatory actions against a major exchange operator.
It also reveals the increasing scrutiny SEC is placing on the cryptocurrency industry as a whole, serving as a reminder that companies operating in the digital asset industry must comply with federal securities laws.
As a reminder, this is not a trading signal or investment advice; it is an opinion, and each trader/investor should know and understand the risks of trading cryptocurrencies.
This should not be regarded as financial advice; feel free to familiarise yourself with our NFA disclaimer.
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