The US Securities and Exchange Commission (SEC) has unveiled an agreement with the cryptocurrency trading platform Bittrex and its co-founder and former CEO, William Shihara, over allegations of operating an unregistered exchange. According to the announcement on August 10 , Bittrex and its affiliate Bittrex Global have agreed to pay a total of $14.4 million in ill-gotten gains, $4 million in prejudice interest, and $5.6 million in civil penalties to resolve the regulatory dispute. The agreement is still subject to court approval.
The SEC's Director of Enforcement, Gurbir Grewal, noted that Bittrex had attempted to evade federal securities laws by altering online statements with token issuers to avoid referring to their products as investment contracts. He emphasized that the economic reality of these products matters more than their labeling Shihara, in response to the settlement, expressed satisfaction with the outcome, stressing the importance of striking a balance between fostering innovation, supporting entrepreneurs, and safeguarding consumers.
The SEC filed a complaint against Bittrex and Shihara in April, alleging that they had operated an unregistered national securities exchange, broker-dealer, and clearinghouse. The regulator also brought a separate enforcement action against Bittrex Global for operating a shared order book with Bittrex. Previously, in October 2022, Bittrex faced enforcement actions from the US Treasury Department's Office of Foreign Assets Control and the Financial Crimes Enforcement Network, resulting in a $29 million settlement.
Bittrex announced its intention to cease US operations in April, citing the country's regulatory environment as the reason for the decision. Following this, the company filed for Chapter 11 bankruptcy in May. As of August 10, the SEC is actively pursuing legal cases a gain several Cryptocurrency firms, including Binance, Coinbase, Ripple Labs, and Terraform Labs. This approach has sparked criticism from some US lawmakers and industry leaders who argue that a more balanced and adaptable regulatory stance is necessary for the evolving cryptocurrency landscape.
