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The SEC has a new target in the crypto space and this is how its going so far

2min Read

American crypto exchange Bittrex received a Wells notice from the SEC, informing it of the regulator’s intention to initiate enforcement action. The news came two weeks after the exchange announced that it would exit the U.S. market due to the lack of regulatory clarity.

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  • The U.S. Securities and Exchange Commission issued a Wells notice to crypto exchange Bittrex last month.
  • The notice was likely issued before the exchange announced its decision to suspend all operations in the United States.

 

The Securities and Exchange Commission (SEC) has initiated enforcement actions against stablecoin issuers in the past. It has also issued Wells Notices to various crypto firms in the market. However, the regulatory watchdog has a new crypto organization in mind for a potential lawsuit.

The Wall Street regulator was reportedly leaning towards bringing a lawsuit against Bittrex, a crypto exchange based in Seattle, Washington. 

Potential enforcement action ahead of departure from the U.S. 

According to a report by the Wall Street Journal, the enforcement division of the SEC was inclined to recommend the agency to pursue a legal case against Bittrex. Staff from the enforcement division informed Bittrex of their intention to recommend the SEC to sue the crypto exchange. The entire debacle stood over alleged violations of investor-protection laws.

David Maria, the exchange’s General Counsel, revealed that news of the potential enforcement action was shared with them last month. As per the Wells notice, Bittrex has been accused of violating laws by conducting business as an exchange, broker-dealer, and clearinghouse. However, this was without first registering with the agency first.

News of the Wells notice came two weeks after the exchange announced that it would wind down its operations in the US. Furthermore, the exchange cited the lack of regulatory clarity as a major factor to exit the American market.

Regulatory requirements are often unclear and enforced without appropriate discussion or input, resulting in an uneven competitive landscape.”

The decision was likely taken after the SEC issued the Wells notice to the firm. Additionally, the general counsel revealed that the exchange was exploring a way to register itself with the SEC.

However, they concluded that there was no way to get registered without shutting down the exchange’s revenue generating activities in the country.

“The lack of regulatory clarity here results in substantial costs and no certainty as to what can and can’t be offered,” Maria added. 

 

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Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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