SEC Charges Crypto Asset Trading Platform Bittrex and its Former CEO for Operating an Unregistered Exchange, Broker, and Clearing Agency

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SEC Charges Crypto Asset Trading Platform Bittrex and its Former CEO for Operating an Unregistered Exchange, Broker, and Clearing Agency

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Press release

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SEC claims that Bittrex should have registered as a clearing agency because it acted as an intermediary in making payments and deliveries upon matching sell and buy orders and maintained custody of customer assets
According to SEC crypto markets suffer from a lack of regulatory compliance, not a lack of regulatory clarity as Bittrex and issuers knew the rules but tried to avoid them
The Securities and Exchange Commission charged Bittrex for operating an unregistered national securities exchange, broker, and clearing agency
SEC claims that Bittrex should have registered as an exchange because they brought together, using a shared order book, the orders for securities from buyers and sellers
SEC claims that Bittrex coordinated with issuers who sought to have their crypto asset made available for trading on Bittrex’s platform to first delete from public channels certain “problematic statements” that believed to lead a regulator to investigate the crypto asset as the offering of a security

Publish date

04

Month
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17

Day
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2023

Year

12

:

00

am

Publisher

SEC

Quotes from

The SEC’s complaint, filed in the U.S. District Court for the Western District of Washington, alleges that Bittrex and Bittrex Global should have registered as an exchange because they brought together, using a shared order book, the orders for securities of multiple buyers and sellers using established, non-discretionary methods under which such orders interacted, and the buyers and sellers entering such orders agreed to the terms of a trade.
Bittrex should have registered as a clearing agency because it acted as an intermediary in making payments and deliveries upon matching sell and buy orders and maintained custody of customer assets
The complaint further alleges that Bittrex and Shihara, who was the company’s CEO from 2014 to 2019, coordinated with issuers who sought to have their crypto asset made available for trading on Bittrex’s platform to first delete from public channels certain “problematic statements” that Shihara believed would lead a regulator, such as the SEC, to investigate the crypto asset as the offering of a security. For example, in an effort to avoid regulatory scrutiny, before Bittrex would make an asset available on its platform, Bittrex and Shihara instructed issuer-applicants to delete statements related to “price prediction[s],” “expectation of profit,” and other “investment related terms.”
"Today’s action, yet again, makes plain that the crypto markets suffer from a lack of regulatory compliance, not a lack of regulatory clarity," said SEC Chair Gary Gensler. "As alleged in our complaint, Bittrex and issuers that it worked with knew the rules that applied to them but went to great lengths to evade them by directing issuer-applicants to ‘scrub‘ offering materials of information indicating that certain crypto assets were securities. Further, Bittrex, as alleged, failed to register and comply with U.S. securities laws as an exchange, broker-dealer, and clearing agency. Cosmetic alterations did nothing to change the underlying economic realities of the offerings and Bittrex’s conduct. Today we’re holding Bittrex accountable for its non-compliance."
SEC Charges Crypto Asset Trading Platform Bittrex and its Former CEO for Operating an Unregistered Exchange, Broker, and Clearing Agency
The Securities and Exchange Commission today charged crypto asset trading platform Bittrex, Inc. and its co-founder and former CEO William Shihara for operating an unregistered national securities exchange, broker, and clearing agency.

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SEC Charges Bittrex and its Former CEO for Operating an Unregistered Exchange, Broker, and Clearing Agency

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SEC Charges Bittrex and its Former CEO for Operating an Unregistered Exchange, Broker, and Clearing Agency

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https://www.sec.gov/news/press-release/2023-78

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SEC Charges Bittrex and its Former CEO for Operating an Unregistered Exchange, Broker, and Clearing Agency

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SEC Charges Crypto Asset Trading Platform Bittrex and its Former CEO for Operating an Unregistered Exchange, Broker, and Clearing Agency

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The Securities and Exchange Commission charged Bittrex for operating an unregistered national securities exchange, broker, and clearing agency

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