Seattle-based crypto exchange Bittrex Inc. has rejected charges by the U.S. Securities and Exchange Commission (SEC) that it and co-founder Bill Shihara operated an unregistered national securities exchange, broker and clearing agency. The SEC filed the charges on Monday.

See related article: U.S.-based cryptocurrency exchange Bittrex lays off 83 employees

Fast facts

  • Bittrex Global GmbH, the exchange’s foreign affiliate, was also charged for failing to register in the U.S. despite sharing a single order book along with Bittrex Inc., according to the SEC’s announcement. The federal agency filed the complaint in the U.S. District Court for the Western District of Washington on Monday.
  • The SEC further alleges that Bittrex and Shihara, who served as chief executive officer of the exchange from 2014 to 2019, coordinated with cryptocurrency issuers to delete “problematic statements” that could lead to regulatory inspection for the offering of securities — such related to “price prediction,” or “expectation of profit.”
  • “The crypto markets suffer from a lack of regulatory compliance, not a lack of regulatory clarity,” SEC Chair Gary Gensler said in the announcement, asserting that Bittrex and associated issuers knew the regulations but made efforts to evade them deliberately.  
  • Bittrex countered with a statement on its official Twitter handle on Monday. “Securities were not offered or traded on Bittrex, nor did Bittrex offer any products that were investment contracts,” the statement said.
  • Bittrex added that the SEC refused to provide guidance on a specific service or cryptocurrency that could violate the federal securities laws, despite multiple requests from the exchange. “We look forward to vindicating our position in court,” said the statement.
  • The complaint against Bittrex is an extension of the SEC’s clampdown on local crypto platforms and issuers, including Kraken exchange, Binance USD stablecoin issuer Paxos, and Coinbase exchange.
  • On April 16, U.S. Republican Congressman Warren Davidson tweeted that he is introducing legislation to remove Gary Gensler from his position as chairman of the SEC, in a response to a tweet from Coinbase chief legal officer Paul Grewal that criticized the agency’s aggressive enforcement on the crypto industry.
  • Bittrex has previously said it is winding down U.S. operations from April 30, due to regulatory uncertainty.

See related article: U.S. SEC committee urges ‘aggressive enforcement’ on crypto, says most tokens are securities