Breaking: US SEC takes action against crypto exchange Bittrex and its former CEO

• The SEC has a new target in crypto town and its none other than crypto exchange Bittrex.
• However, Bittrex announced that it would be wrapping up operations in the US on grounds of not being economically feasible.

The United States Securities and Exchanges Commission (SEC) has taken action against yet another crypto entity. This time around, crypto exchange – Bittrex and its former CEO have fallen under the radar of the enforcement authority.

In its press release, the SEC stated that it was taking action against the crypto exchange and its former executive for not registering as a national securities exchange, clearing agency, and broker.

The former CEO was identified as William Shihara, who was also the co-founder of the exchange. The press release further read,

“The SEC also charged Bittrex, Inc.’s foreign affiliate, Bittrex Global GmbH, for failing to register as a national securities exchange in connection with its operation of a single shared order book along with Bittrex.”

Notably, before moving to take legal action, the commission had sent a Wells Notice to Bittrex, according to a report by the Wall Street Journal. Moreover, the notice was sent before the exchange announced its decision to wind down its operations in the United States.

The reason for exit was cited as “not economically viable for us to continue to operate in the current U.S. regulatory and economic environment.” Bittrex is expected to exit the market by the end of this month, i.e., 30th April 2023.

Additionally, the commission stated that action would be taken against the former CEO for coordinating with token issuers in removing statements that would draw the SEC’s attention. The press release stated,

“coordinated with issuers who sought to have their crypto asset made available for trading on Bittrex’s platform to first delete from public channels certain “problematic statements” that Shihara believed would lead a regulator, such as the SEC, to investigate the crypto asset as the offering of a security.”

SEC lists more crypto assets as securities

Furthermore, in its complaint, the SEC claimed that the exchange offered and sold six tokens that were securities. The complaint listed OmiseGo [OMG], DASH, Algorand [ALGO], TokenCard [TKN], NAGA [NGC], I-House Token [IHT] as securities.

Additionally, the commission alleged that the exchange proceeded to list tokens that it had “recognized had the characteristics of securities”. These tokens were identified as MANA and Powerledger (POWR).

Prior to this action, the regulatory authority had claimed that Tron [TRX] and BitTorrent token [BTT] were securities in its lawsuit against Justin Sun – the creator of Tron, and Tron Foundation. In relation to this case, the commission had also charged eight celebrities for promoting the tokens.

Subsequently, the SEC Chairman – Gary Gensler remarked that “many crypto trading platforms already come under the current definition of an exchange.” Moreover, speaking about decentralized exchanges, Gensler stated that “calling yourself a DeFi platform is not an excuse to defy securities laws.”