US Crypto Exchange Bittrex Under Fire From SEC
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The American crypto exchange Bittrex is reportedly facing potential enforcement action from the U.S. Securities and Exchange Commission (SEC).
The Seattle-based company was already winding down operations before receiving notification of prospective action from the SEC.
An End to the Crypto Exchange Operations in America
The U.S. Securities and Exchange Commission (SEC) may take action against the crypto exchange Bittrex despite the platform’s plans to cease local operations.
Bittrex was originally one of the largest marketplaces in the nation for exchanging digital assets. However, its troubled domestic history ends with a regulatory threat and a decision to vacate the United States permanently.
According to a Wall Street Journal article published on April 16, the U.S. Securities and Exchange Commission (SEC) enforcement section recommends that the organization sue Bittrex for suspected investor protection violations.
Bittrex general counsel David Maria stated that the enforcement unit warned Bittrex about probable SEC action in March.
By then, the Seattle-based crypto company had already begun to wind down its U.S. operations, citing the difficulties of working with U.S. regulators, who had brought enforcement actions against more than 100 crypto defendants in the previous six years.
Due to continued regulatory uncertainty, we have made the difficult decision to wind down our U.S. operations, effective April 30, 2023. All funds are safe and can be fully withdrawn immediately.
This does not affect customers of @BittrexGlobal https://t.co/MY4u7XLk9z
— Bittrex (@BittrexExchange) March 31, 2023
The SEC stated that Bittrex had broken the law by operating as an exchange, broker-dealer, and clearinghouse without registering with the watchdog in the notice of potential enforcement action or Wells notice.
According to Bittrex’s general counsel, the SEC and Bittrex discussed how to register their company in late 2022.
However, the cryptocurrency company discovered there was no way to comply with the SEC’s regulations without effectively ceasing all revenue-generating operations in the country.
Attorney Maria emphasized that Bittrex’s inability to adhere to SEC standards was caused by the agency’s initial failure to establish clear cryptocurrency regulations.
According to him, the absence of regulatory clarification causes high costs and uncertainty regarding what may and cannot be given.
Since the business is ceasing operations in the US, Maria said Bittrex is unsure whether the SEC would bring a lawsuit.
In the event that the government decides to act, Bittrex will go to court unless the regulators come up with a reasonable settlement offer.
The information was released after Bittrex declared that all operations would cease in the United States on March 31 due to the difficult legal and economic climate.
The exchange instructed customers in the U.S. to remove their funds by April 30, 2023.
SEC Clamp Down Causes Uncertainty for Crypto Operations
Bittrex faced several issues before deciding to leave the country.
In 2022, the crypto exchange agreed to pay more than $29 million in fines to the Office of Foreign Assets Control and Financial Crimes Enforcement Network of the U.S. Department of the Treasury.
The agreement addressed sanctions violations in the Crimean Peninsula, Cuba, Iran, Sudan, and Syria between 2014 and 2017.
The closure of Bittrex’s U.S. operations serves as a reminder of the challenges encountered by crypto firms attempting to operate in an ambiguous regulatory landscape.
According to Ripple CEO Brad Garlinghouse, the Securities and Exchange Commission’s regulatory approach puts the United States at serious risk of losing its appeal as a center for the upcoming wave of blockchain and cryptocurrency innovation.
Garlinghouse issued the warning on March 3, 2023, stating that the U.S.’s cryptocurrency market regulation is behind that of countries like Australia, Japan, the United Kingdom, Singapore, and Switzerland.
He emphasized that this is why the business has already started moving outside the country.
According to SEC chair Gary Gensler, many crypto firms have ignored the regulations his organization enacts to safeguard investors.
He has advocated for registering exchanges like Bittrex with the SEC, which would include dismantling their operations, eliminating conflicts of interest, and transforming into more conventional stock exchanges.
Many cryptocurrency exchanges contend the digital assets they list are not securities, so they have opposed the SEC’s request to regulate them.
