Bittrex Agrees to Pay $24 Million to Settle SEC Lawsuit

Jimmy Aki
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Crypto exchange Bittrex has agreed to pay a $24 million settlement in response to the Securities and Exchange Commission’s (SEC) charge of operating as an unregistered brokerage.

The SEC Eagle Claws Continous to Prawl Unregulated Platforms in the DeFi Sector

On August 10, the Securities and Exchange Commission (SEC) announced that Bittrex Inc. and former chief executive officer (CEO) William Shihara had formally reached a settlement regarding the lawsuit.

The cryptocurrency exchange decided to settle charges for operating as an unregistered national securities exchange, clearing agency, and broker for years.

Bittrex Inc. subsidiary, Bittrex Global GmbH, also agreed to charges of operating as a national securities exchange without proper license and registration by the SEC.

In the public notice, the SEC stated that the exchange is in conclusive agreement to pay a substantial settlement of $24 million after a legal filing in a Federal Court in Seatle.

Bittrex and Bittrex Global settlement breakdown includes disgorgement of $14.4 million, prejudgement interest of $4 million, and a civil penalty fee of $5.6 million, totaling a monetary payment of $24 million.

The U.S. regulatory cited that the settlement is subject to court approval.

As detailed in the published announcement, Gurbir S. Grewal, the operating Director of the SEC’s Division of Enforcement, stated that Bittrex worked with tokens issuers to blur their online statement of any sign that they were investment contracts.

Grewal further cited that the act was solely geared towards evading the Federal securities law, which they failed. He iterated that the Bittrex settlement indicates that platforms cannot escape liability deceptive schemes.

Bittrex had initially tried to alter descriptions of economic offerings, which was caught on by the U.S. regulatory body.

The announcement, beyond doubt, solidifies the SEC’s stance on aggressively pursuing non-compliance in the crypto industry, further protecting U.S.-based traders and investors from fraud and losses.

As part of the proposed agreement, Bittrex Inc., Bittrex Global, and William Shihara are also subject to an injunction that prohibits them from breaching U.S. securities law onward.

Bittrex Maintains Not Guilty Stance Amid Settlement Report

Bittrex first received SEC’s lawsuit on April 17, which entailed the charge of operating an unregistered exchange, broker, and clearing agency. The exchange maintained its stance as not being guilty to the spate of charges by the SEC.

According to the published press release, SEC clearly stated that the defendants (Bittrex and Bittrex Global) neither admitted nor denied the allegations.

BSC news exclusively reported that representatives from Bittrex expressed contentment with the proposed resolution pending the court’s approval.

However, the need for SEC to find a balance between nurturing innovation and safeguarding consumers was stressed, with the settlement being the potential cornerstone for onward movement.

Crypto Communities Slams SEC over Lack of Clarity and Creditor Motive

After the news of the Bittrex settlement permeated global crypto communities, John E. Deaton, the Managing Partner of the Deaton Law Firm and founder of Crypto-Law.us, cited his disappointment in the case.

In response to SEC’s announcement on the X platform, Deaton cited that the SEC rather throw out lawsuits as a means to be the highest creditors under the deceptive motive of protecting investors.

He further alleged that Grewal had unsettled investment cases and should answer a few questions about recent law cases if there’s nothing to hide.

While these can be classified as mere litigations, the majority of crypto communities expressed their disappointment on Bittrex settlements due to SEC being the major creditor.

Experts believe that the SEC has amassed incredible legal authority, so they can easily spread litigations without proper clarity.

While the crypto sector and the broader decentralized finance (DeFi) sector continues to soar, experts believe that unclear laws by the U.S. regulator may limit growth potentials.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.