Bankrupt cryptocurrency exchange Bittrex, along with its CEO, has reached a settlement with the Securities and Exchange Commission (SEC) for a sum of $24 million. This resolution comes after the SEC charged the exchange in April for its operation as an unregistered exchange, media reports said.
Bittrex, its foreign affiliate, and former CEO William Shihara neither admitted nor denied the allegations. Bittrex’s foreign affiliate, known as Bittrex Global GmbH, has agreed to settle charges regarding its failure to register as a national securities exchange, according to an official statement by the SEC.
Gurbir S. Grewal, the director of the SEC’s enforcement division, commented, “For a considerable duration, Bittrex collaborated with token issuers to eliminate any indications that their online communications constituted investment contracts. This attempt to sidestep federal securities laws proved unsuccessful.”
Grewal further stated, “This settlement underscores that altering labels or descriptions cannot absolve one from accountability. What holds significance are the genuine economic implications of these offerings.”
CEO Shihara responded to the settlement by terming it a “positive resolution,” conveyed through an emailed statement. He emphasized the importance of striking a balance between nurturing innovation, supporting entrepreneurs, and safeguarding consumers. Shihara expressed hope that the settlement’s implications would aid in achieving this balance.
Bittrex initiated Chapter 11 bankruptcy protection procedures in May, revealing estimated asset and liability values ranging between $500 million and $1 billion.
Notably, Bittrex had announced its withdrawal from the U.S. market in March. Previously, the company had held a prominent position among U.S. exchanges, possessing an approximate 23% market share in USD trading support at the beginning of 2018, as indicated by data from The Block.
The SEC has maintained a stringent stance on cryptocurrency exchanges, underscoring the necessity for registration with the regulatory body. In a similar vein, the SEC filed charges against Coinbase in June for its unregistered exchange operations.
SEC Chair Gary Gensler has consistently stressed the significance of compliance within the cryptocurrency industry. In a recent interview with Bloomberg, Gensler highlighted the prevailing lack of adherence to established anti-fraud and manipulation measures in the trading platforms handling various crypto tokens.
