The United States Securities and Exchange Commission has a new target for its investigation into the cryptocurrency market. Their most recent target is the cryptocurrency exchange Bittrex, which they claim was operating at the same time as a national securities exchange, broker, and clearing agency—a breach of federal laws. Bill Shihara, the former CEO of the exchange, and Bittrex Global GmbH are also accused.
Bittrex Scrutiny
The SEC will primarily look into the matter of Bittrex cooperating with cryptocurrency issuers to “delete… ‘problematic statements,'” according to the press release from last Monday. Price forecasts and remarks that suggest an “expectation of profit” are among the aforementioned “problematic statements.”
The regulatory body has further asserted that because Bittrex offered the services of all three categories of organizations, it should have registered as an exchange, clearing agency, and a broker. However, SEC Enforcement Director Gurbir Grewal asserted that Bittrex’s case “should send a message to other non-compliant crypto market intermediaries.”
He elaborated on their complaint against the crypto exchange, which includes evading the federal securities laws’ registration requirements, advising other crypto asset security issuers to do the same by changing their offering materials, and consolidating various market intermediary functions under one roof in order to maximize profits.
Bittrex’s Appeal
Bittrex has responded to the charge by stating that the regulator declined to flag the tokens it believed were securities. According to their official statement, the SEC has refused to disclose a notice of particular activity that it believes violated federal securities laws for the previous five years, despite several, specific demands.
If they have added, “Specifically, on multiple occasions, we asked them to tell us what digital assets on our platform they viewed as securities so that we could review and potentially delist them. They refused to do so.”
The relevant platform subsequently refuted the SEC by asserting that it has always operated within the boundaries of the law over the past few years and that it looks forward to “vindicating” its stance in court.
The SEC’s actions, they continued, “will directly and significantly harm U.S. customers and U.S. employees in this industry.” Furthermore, the aforementioned is intended to ultimately give the nation a severe disadvantage in the advancement of blockchain technology, including future applications far beyond Bitcoin.
Bittrex Attempts to Exit US Market
It should be noted that Bittrex announced plans to quit the US market by the end of April, claiming “the current U.S. regulatory and economic environment” as the cause. Just this weekend, the related company threw fuel to the flames by claiming in an interview that the company received a Wells Notice – a declaration that the SEC’s Enforcement Division discovered evidence of legal infractions – in March. He went on to say that Bittrex will defend the litigation until the SEC makes a “reasonable settlement offer.”
