The U.S. Securities and Exchange Commission (SEC) has laid its nasty hands into another digital currency company. This time, the victim of the agency’s wrath is Bittrex Inc., along with its former chief executive officer William Shihara.
The SEC Is At It Again
The agency says Bittrex broke its laws for years and that this whole time, it operated as an unregistered securities exchange. This appears to be the narrative of the SEC each time it goes after a crypto firm. One wonders if these companies really and truly are engaged in such illicit behavior or if the agency is simply pulling this out of a hat as an excuse to go after whatever digital enterprise it wants.
The complaint was filed by the SEC in the U.S. District Court in Western Washington. The firm mentioned earlier this year that it was of the belief that many crypto companies throughout the country were selling digital currencies that, while popular, could easily be labeled securities. As a result, it said that many of these businesses were out of compliance and thus hadn’t taken part in appropriate registration protocols with the SEC, and now it looks like Bittrex has fallen into that category.
In a statement, SEC head Gary Gensler mentioned:
Today’s action, yet again, makes plain that the crypto markets suffer from a lack of regulatory compliance, not a lack of regulatory clarity. As alleged in our complaint, Bittrex and issuers that it worked with knew the rules that applied to them but went to great lengths to evade them by directing issuer-applicants to ‘scrub‘ offering materials of information indicating that certain crypto assets were securities.
The SEC has really been going after the world’s leading crypto companies as of late. Not long ago, it engaged in a settlement with digital exchange Kraken that forced the firm to give up $30 million in penalties. It was also required to end all its staking services.
The SEC has also issued a Wells notice to Coinbase, meaning that while the latter hasn’t been charged yet, it can likely expect to be charged with something in the coming future. A Wells notice is an indication that you are being watched.
The Company’s History
Bittrex initially launched in 2014 and became one of the world’s 50 largest digital currency exchanges soon after. Per the SEC, the company garnered more than $1 billion in revenue between 2017 and 2022. From its launch until the year 2019, Shihara served as the firm’s CEO.
Prior to today’s ruling, Bittrex had announced that it was looking into potentially shuttering its U.S. division, citing “continued regulatory uncertainty” as the reason why. In October of last year, the company was slapped with a $53 million fine by the U.S. Treasury Department due to its business engagements.
