- SEC charges Bittrex for running an “unregistered national securities exchange, broker, and clearing agency”.
- The complaint alleges that Bittrex put profits before investor protection and did not comply with registration requirements of the federal securities laws.
Bittrex, a crypto platform, is in trouble with the US Securities and Exchange Commission (SEC) for non-compliance related accusations. In its complaint, the agency charges the company’s co-founder, William Shihara, for operating an “unregistered national securities exchange, broker, and clearing agency,” and its foreign affiliate, Bittrex Global GmbH, for failing to register as a national securities exchange. The SEC alleges that Bittrex repeatedly prioritized profits over investor protection and depended on circumventing registration requirements of the federal securities laws.
Today’s action not only holds Bittrex accountable for misconduct that we allege put investors at risk, but should also send a message to other non-compliant crypto market intermediaries to follow the federal securities laws or be held accountable for their violations.
The complaint follows a Wells notice in March 2023, after which the crypto exchange announced it was winding up US operations. However, it was only on Sunday that reports revealed the Wells notice that preceded the exchange’s decision to leave. The SEC charges the company with facilitating asset trade for tokens that were offered and sold as securities. Additionally, the SEC said it would like to send a message to other crypto players with this complaint.
The regulatory agency accused CEO Shihara of deleting problematic statements from the public domain to prevent agencies from probing the aspect of selling crypto assets as securities. The deleted statements included terms like “price prediction” and “expectation of profit,” among others. The complaint also mentioned six cryptocurrencies, including Algorand, OmiseGO, and NAGA, which were available for trading on the platform in the form of securities.
This move adds to the growing list of crypto businesses under the US SEC’s radar. The SEC stated that today’s action holds Bittrex accountable for its alleged misconduct that put investors at risk. It also sends a message to other non-compliant crypto market intermediaries to follow federal securities laws or be held accountable for their violations.