The US Securities and Exchange Commission (SEC) has charged cryptocurrency exchange Bittrex and its CEO, William Hiroaki Shihara, with operating an unregistered exchange, broker and clearing agency. The charges come after a report revealed that Bittrex had received a Wells Notice from the SEC. The regulator alleges that Bittrex sold crypto assets as securities since 2014 and should have registered the exchange. The SEC claims that Bittrex and Bittrex Global leveraged a shared order book and should have registered as a clearing agency and a broker. Bittrex’s general counsel, David Maria, said the exchange would contest the action in court unless the regulator “presented a reasonable settlement offer”.
SEC chair Gary Gensler said that “the crypto markets suffer from a lack of regulatory compliance, not a lack of regulatory clarity”. He added that 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’s complaint does not offer any settlement, and the court filing says a “jury trial [is] demanded”.
The SEC’s enforcement action against Bittrex is expected to lead to increased regulatory scrutiny in the cryptocurrency industry. The lack of regulation in the crypto markets has been a concern for many regulators around the world. The SEC’s action against Bittrex is part of its efforts to bring order to the cryptocurrency industry and protect investors from fraudulent activities. The SEC has been clear that it will not tolerate any violations of securities laws in the cryptocurrency industry.
The cryptocurrency industry has been growing rapidly in recent years, with many new exchanges and tokens being launched every day. However, the lack of regulation has made it difficult for investors to know which tokens are legitimate and which are not. The SEC’s action against Bittrex is a warning to other cryptocurrency exchanges that they must comply with securities laws or face enforcement action.
In conclusion, the SEC’s enforcement action against Bittrex is a significant development in the cryptocurrency industry. It shows that regulators are taking the lack of regulation in the industry seriously and are willing to take action against exchanges that violate securities laws. The action is expected to lead to increased regulatory scrutiny in the industry, which will be beneficial for investors and legitimate players in the industry. It remains to be seen how Bittrex will respond to the charges, but it is clear that the SEC is determined to bring order to the cryptocurrency industry.