Digital asset exchange Bittrex reaches $24 million settlement with SEC
Digital asset exchange Bittrex, along with its former CEO William Shihara, has reached a $24 million agreement with the US Securities and Exchange Commission amid filing issues.
The SEC filed its complaint in the US District Court for the Western District of Washington on April 17, 2023. The lawsuit alleged that from 2014 to 2019, Bittrex’s services to US investors involving crypto assets were considered unregistered securities.
Furthermore, the CEO reportedly urged asset issuers to remove “problematic statements” from their public channels, aiming to avoid SEC scrutiny over the classification of these cryptocurrencies as securities.
On August 11, the Securities and Exchange Commission revealed that Bittrex had agreed to settle the complaint by paying $24 million.
Bittrex Global GmbH, a subsidiary of Bittrex Inc., as part of the settlement that it failed to register as a national stock exchange. However, the accused neither admitted nor denied the allegations.
Gurbir S. Grewal, SEC’s chief enforcement officer, commented on the settlement. He pointed to Bittrex’s attempts to alter the public statements of token issuers to bypass federal securities regulations. He emphasized that changing labels or descriptions does not relieve the parties from legal liability.
Bittrex bankruptcy
In March, Bittrex announced its intention to wind down US operations, which led to a surge in withdrawal requests. This culminated in the cryptocurrency exchange filing for bankruptcy on May 8, revealing $300 million in customer funds and bitcoin holdings as of May 10.
After the US government opposed Bittrex’s efforts to allow customers access to their assets due to unpaid penalties related to penalties, a Delaware bankruptcy court ruling on June 13 allowed withdrawals for uncontested claims to be facilitated.
However, the ruling did not finalize ownership of the assets, which could pave the way for legal complications in the future.
