• The SEC has charged crypto exchange Bittrex and its former CEO, William Shihara, with operating as an unregistered securities exchange, broker-dealer and clearinghouse.
• Bittrex received a Wells Notice from the agency in March.
• The SEC alleges that Bittrex coordinated with crypto asset issuers to delete “problematic statements” from their documentation to avoid regulatory scrutiny.
The SEC Charges Crypto Exchange Bittrex
The United States Securities and Exchange Commission (SEC) on Monday charged cryptocurrency exchange Bittrex and its former CEO, William Shihara, for operating an illegal securities exchange, broker-dealer and clearinghouse. The suit comes a day after news broke that the exchange received a Wells Notice from the agency.
Bittrex Receives Wells Notice
According to Bittrex’s general counsel, David Maria, the exchange received a Wells Notice from the enforcement division of the SEC in March. A Wells Notice is a formal notice issued by the SEC stating that it is considering legal action against an entity or individual.
Bittrex Plans To Shut Down U.S Operations
Bittrex announced last month that it plans to halt services in the U.S due to economic and regulatory concerns. The firm advised customers to withdraw their funds by April 30th 2023further alleged that since 2017 – 2022 ,the exchanged earned over $1.3 billion in revenue from transaction fees from investors while operating as a broker ,exchange and clearinghouse .
SEC’s Allegations Against Bittrex
The agency alleges that Shihara coordinated with crypto asset issuers wanting to make their tokens available for trading on its platform . According to them ,Shihara instructed issuer applicants to delete statements related to „price predictions“ ,“expectation of profit“and other „investment related terms“in order for them not be investigated as securities .
Conclusion
As companies dealing with new technologies continue expanding into existing markets ,they need more regulatory clarity over what can be offered legally or else they run the risk of being fined or shut down all together . In this case ,Bittex was unable comply with regulations due lack of clarity which ultimately led them shutting down operations in USA .