In a landmark agreement, cryptocurrency exchange Bittrex and its former CEO William Shihara have settled with the United States Securities and Exchange Commission (SEC). Stemming from accusations of operating an unregistered exchange, this resolution has sparked significant attention in crypto.
Dissecting the Bittrex Charges and Fines
The SEC’s lawsuit resulted in Bittrex and its global affiliate agreeing to a hefty settlement of $24 million. Broken down, this comprises:
- Restitution of $14.4 million in earnings by Bittrex.
- An additional $4 million in accrued interest.
- A penalty summing up to $5.6 million.
The heart of the SEC’s accusations centers on Bittrex acting as an unregistered broker, exchange, and clearing agency. The regulatory body asserts that Bittrex offered and sold securities without the necessary national securities exchange registration.
Follow CryptoMode on Twitter, Youtube and TikTok for news updates! Furthermore, allegations suggest that under Shihara’s direction, Bittrex urged crypto asset issuers to eliminate certain online statements. This action was primarily targeted at avoiding SEC scrutiny, especially before asset trading commenced on their platform.
Gurbir S. Grewal Speaks Out
Highlighting the significance of this case, Gurbir S. Grewal, the Director of the SEC’s Division of Enforcement, emphasized that promoting a crypto asset doesn’t dictate its security status. In his words:
“The focus remains on the economic realities of offerings. Label alterations or description changes can’t negate liabilities. I commend the SEC team for ensuring crypto sector adherence and extending relief to affected investors.”
While they’ve settled, it’s crucial to note that Bittrex hasn’t confirmed or refuted the SEC’s claims. Subject to court endorsement, both Bittrex and Shihara will face a permanent ban from violating specific securities regulations.
Interestingly, this lawsuit was initiated soon after Bittrex decided to cease US operations, followed by a Chapter 11 bankruptcy filing. However, Bittrex Global’s operations remain unaffected by this bankruptcy declaration.
SEC’s Stance on Ripple and Broader Implications
This settlement follows closely on the heels of the SEC’s disagreement with a recent verdict favoring Ripple. In a turning point for Ripple, Judge Torres declared that Ripple’s XRP token isn’t a security for retail investors.
Contrary to this, the SEC is gearing up to challenge this ruling, foreseeing potential ramifications on their ongoing cases. It will go up against crypto giants like Binance and Coinbase. Significantly, Coinbase has invoked Ripple’s decision thirteen times to dismiss the case.
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