- Crypto
- August 12, 2023
- 3 minutes read
Crypto Exchange Bittrex Fined $24M By US SEC
Crypto exchange Bittrex has agreed to pay a $24mn fine to settle charges brought by the U.S. Securities and Exchange Commission…
Crypto exchange Bittrex has agreed to pay a $24mn fine to settle charges brought by the U.S. Securities and Exchange Commission (SEC). The agency filed a lawsuit against Bittrex this April, claiming it operated an unregistered national securities exchange, broker, and clearing agency. William Shihara, Bittrex’s former chief executive, was also targeted in the lawsuit.
- Bittrex was founded in the U.S. in 2014 by three entrepreneurs; Shihara, Richie Lai, and Rami Kawach.
Bittrex and its international affiliate, Bittrex Global, will pay a $5.6mn civil penalty, prejudgment interest of $4mn, and disgorgement of $14.4mn, totaling $24mn. The company neither admitted nor denied the allegations as part of the settlement.
According to the SEC, Bittrex earned $1.3bn in revenues from 2017 to 2022, mostly from transaction fees.
- U.S. Congress hasn’t specified whether cryptocurrencies are legally considered securities. However, the SEC argues that most cryptos are securities and has filed several lawsuits based on its rationale. This June, the agency filed lawsuits against Binance, the world’s largest crypto exchange, and Coinbase, America’s largest crypto exchange, for operating as unregistered securities trading platforms.
Bittrex is no stranger to run-ins with American authorities. Last October, it agreed to pay $53mn in fines to the U.S. Treasury Department for violating anti-money laundering and suspicious activity reporting requirements. Shortly after this fine, Bittrex gave up on its U.S. operations, citing stringent regulations.
- Bittrex formally exited the U.S. this April. In May, it filed for voluntary bankruptcy to wind up operations. The exchange opened for customer withdrawals following a court order and will remain open until August end.
- Settling with the SEC finalizes Bittrex’s exit from the U.S., its home country. Bittrex Global, the international division based in Liechtenstein, remains operating.
Shihara, Bittrex’s former chief executive, called the SEC settlement “a good outcome.” “It’s vital that our country strikes a balance between fostering innovation, encouraging entrepreneurs and the need to protect consumers, and I hope today’s proposed settlement helps move that forward,” he said.
