A $24 million settlement will be paid by Bittrex, a bankrupt crypto trading platform that ceased U.S. operations earlier this year, to resolve charges from the U.S. Securities and Exchange Commission (SEC) for operating as an unlicensed exchange, broker, and clearing agency.
Bittrex has agreed to settle legal disputes by paying $24 million, which includes disgorgement, prejudgment interest, and civil penalties, originating from SEC charges filed this April. Previously, Bittrex had settled for $24 million and $29 million with the U.S. Department of Treasury over another enforcement action. Notably, this year has witnessed significant SEC enforcement actions within the crypto industry, targeting major exchanges like Binance, Coinbase, and Kraken.
Resolving issues with the U.S. regulator, Bittrex and its international counterpart, Bittrex Global, will pay $14.4 million in disgorgement, $4 million in prejudgment interest, and $5.6 million in civil penalties. This settlement awaits court approval. Bittrex Global serves as the international extension of the Bittrex brand.
Without admitting or denying the allegations, Bittrex, along with its co-founder and former CEO William Shihara, reached a settlement with the SEC. Back in April, the SEC accused Bittrex and Shihara of running an unregistered national securities exchange, broker, and clearing agency since 2014.
Moreover, Bittrex was accused by the regulator of collaborating with token issuers to “cleanse” their online statements of indications that they were actually investment contracts, aiming to skirt federal securities laws.
SEC enforcement director Gurbir Grewal emphasized the importance of the economic realities of offerings, stating that “changing labels or descriptions doesn’t eliminate liability,” which is underscored by the settlement.
In the world of cryptocurrency, the U.S. Department of the Treasury imposed other enforcement actions on Bittrex in October 2022, resulting in settlements of $24 million and $29 million. Bittrex, facing these challenges, announced in March its plan to withdraw U.S. operations due to the prevailing regulatory climate. Furthermore, prominent exchanges such as Binance, Coinbase, and Kraken have also encountered legal challenges.
Bittrex’s legal outcomes were described as favorable by those involved. Shihara, who stepped down from Bittrex in 2019, expressed that the resolution reached was a “positive result,” and a company spokesperson echoed this sentiment, expressing satisfaction with the case’s conclusion, as reported by Reuters.
Additionally, the SEC intends to challenge the ruling in its case against Ripple Labs, where a federal judge declared that XRP is not considered a security. Recently, the SEC also took action against Richard Heart, a promoter in the crypto space, for activities linked to his HEX crypto token.
Despite these multiple regulatory events, bitcoin has experienced a remarkable rise of approximately 78% since the year’s beginning.
