Apr 17, 2023 - Economy

SEC levies complaint against crypto exchange Bittrex

SEC Chairman Gary Gensler; Source: Al Drago/Bloomberg via Getty Images.

The Securities and Exchange Commission is suing Seattle-based Bittrex, less than a month after the crypto exchange said it was leaving the U.S. market due to regulatory uncertainties.

Driving the news: The SEC on Monday charged the platform for illegally operating a national securities exchange, clearing agency and broker, servicing U.S. investors.

  • The lawsuit also names former chief Bill Shihara and parent company Bittrex Global GmbH.

The intrigue: The complaint argues that Bittrex was purposefully non-compliant, and not unclear, a message SEC Chair Gary Gensler also tweeted Monday.

  • It alleges the company, over the course of Shihara's tenure, purposely evaded rules that it knew applied to it, coordinating with crypto issuers to "scrub" certain statements that would have otherwise precluded the asset from trading on Bittrex's platform.

Quick take: Like with other SEC complaints that investigate matters that happened years ago, some, more obscure tokens are back in the spotlight.

Details: omiseGo (OMG), algorand (ALGO), dash (DASH), tokencard (TKN), naga (NGC) and i-house token (IHT) were all named as securities in the complaint.

What we're watching: Whether other crypto exchanges that list those tokens will pull them off as a result of the SEC complaint.

Flashback: The SEC's enforcement division reached out in March to notify the exchange of a possible lawsuit, according to the Wall Street Journal.

  • Bittrex's general counsel said that the firm may litigate the issue unless there was a "reasonable settlement offer."
  • Of note: The crypto exchange weeks ago announced that it was shutting down U.S. operations.

What they're saying: Bittrex Global said in a press release that it has "no U.S. customers" and that, apart from the Wells Notice, it received no written communication from the SEC. The company said it plans to "vigorously defend" its position in court.

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