Bittrex Agrees to $24 Million Settlement with SEC Over Rule Violations
In response to allegations of operating without necessary registration, Bittrex and its global affiliate have agreed to a $24 million settlement with the Securities and Exchange Commission (SEC). The allegations spanned a five-year period from 2017 to 2022, during which the SEC claimed that Bittrex functioned as an unregistered securities exchange, broker, and clearing agency, generating over $1.3 billion in revenue.
Key Points:
- Bittrex and its global affiliate have settled with the SEC for $24 million.
- The allegations state that Bittrex operated without proper registration from 2017 to 2022.
- The SEC claimed Bittrex functioned as an unregistered securities exchange, broker, and clearing agency.
- Former CEO William Shihara referred to the settlement as a “good outcome.”
- Previous allegations suggested collaboration between Bittrex, Shihara, and asset issuers to evade regulation.
Former CEO William Shihara, who served from 2014 to 2019, described the settlement as a “good outcome” while neither admitting nor denying the allegations. Shihara expressed hope that the resolution would strike a balance between investor protection and industry innovation. The SEC’s previous lawsuit had suggested a collaborative effort to remove content that might attract regulatory attention.
Bittrex’s fortunes took a downturn in May when it filed for bankruptcy and ceased operations in the US. The crypto industry continues to face scrutiny, with SEC Chair Gary Gensler asserting the agency’s oversight over many tokens. Despite Ripple’s recent legal victory against the SEC, it appears to have had minimal impact on Gensler’s stance.
Hot Take:
The $24 million settlement between Bittrex and the SEC highlights the regulatory challenges faced by crypto exchanges. While the former CEO sees the resolution as positive, it serves as a reminder to the industry that adherence to regulatory requirements is crucial for long-term success. With ongoing regulatory scrutiny, crypto exchanges must prioritize compliance to build trust and foster innovation in the rapidly evolving crypto landscape.
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