Crypto exchange Bittrex coughs up $24 million to settle SEC charges
Cryptocurrency exchange Bittrex has agreed to pay $24 million to settle Securities and Exchange Commission charges that it was operating an unregistered national securities exchange, broker, and clearing agency.
The charges were initially made four months ago during a slew of clampdowns on crypto platforms by the SEC.
SEC chiefs said Bittrex had acted as an unregistered broker, exchange, and clearing agency by providing services to US investors in connection with crypto assets that the SEC’s complaint says were offered and sold as securities.
The complaint further alleged that Bittrex and its former CEO from 2014 to 2019 – William Shihara – directed issuers who sought to have their crypto assets made available for trading on Bittrex’s platform to first delete from public channels certain “problematic statements” that Shihara believed would lead a regulator, such as the SEC, to investigate whether the crypto asset was offered and sold as a security.
It also claimed the exchange earned upward of $1.3 billion in revenue from transaction fees by investors.
Bittrex and Bittrex Global agreed they would pay two fines – $14.4 million and $4 million, as well as a civil penalty of $5.6 million.
“For years, Bittrex worked with token issuers to ‘scrub’ their online statements of any indicia that they were investment contracts—all in an effort to evade the federal securities laws. They failed,” said Gurbir S Grewal, Director of the SEC’s Division of Enforcement.
“Today’s settlement makes clear that you cannot escape liability by simply changing labels or altering descriptions because what matters is the economic realities of those offerings. I am grateful to the SEC staff for aggressively pursuing non-compliance in the crypto industry, resolving this matter, and bringing additional relief to harmed investors.”