The bankrupt cryptocurrency exchange Bittrex has agreed
to pay the Securities and Exchange Commission (SEC) USD $24 million in fines.
The settlement is related to allegations that the cryptocurrency
exchange offered unregistered securities to investors in the US.
According to the
regulator, Bittrex operated as a securities exchange , broker, and
clearinghouse without obtaining proper registration. Of the sum Bittrex will
pay the regulator, USD $14.4 million constitutes disgorgement, with an
additional USD $4 million as prejudgment interest and USD $5.6 million in civil
money penalties.
The SEC’s allegations extend further, claiming that
Bittrex instructed crypto issuers to remove public statements that could
potentially suggest their transactions might have violated the regulations.
However, the exchange neither acknowledged nor refuted the claims in the
settlement.
The terms of the settlement are
reportedly subject to approval by the bankruptcy court, considering Bittrex’
recent bankruptcy filing. Thus, the exchange has a 90-day window to pay the
fine, failure to which the regulator could reportedly bring further charges against the
company.
The SEC’s Enforcement
Director, Gurbir Grewal, said: “Today’s settlement makes clear that you
cannot escape liability by simply changing labels or altering descriptions
because what matters is the economic realities of those offerings.”
Bankruptcy Filing
Based in Seattle,
Bittrex filed
for bankruptcy in May
following allegations by the SEC regarding its operations of an
unregistered securities exchange. The company terminated its activities in the
US on April 30, clarifying that the bankruptcy filing will not affect its
global operations offered through Bittrex Global, which caters to customers
outside the US.
Amidst the bankruptcy, Bittrex said that it still holds cryptocurrency assets belonging to US
customers who had not withdrawn their funds prior to April 30, according to a
report by Reuters. Filed in a court in Wilmington, Delaware, Bittrex’s
bankruptcy filing shows that the company has between USD $500 million and USD
$1 billion in both
assets and liabilities.
Bittrex’s case is not an
isolated incident, as the SEC has targeted other major cryptocurrency
exchanges, including Coinbase and Binance, with similar charges. In the past, the regulator
has stated that cryptocurrencies are securities that must be
brought under its purview.
The bankrupt cryptocurrency exchange Bittrex has agreed
to pay the Securities and Exchange Commission (SEC) USD $24 million in fines.
The settlement is related to allegations that the cryptocurrency
exchange offered unregistered securities to investors in the US.
According to the
regulator, Bittrex operated as a securities exchange , broker, and
clearinghouse without obtaining proper registration. Of the sum Bittrex will
pay the regulator, USD $14.4 million constitutes disgorgement, with an
additional USD $4 million as prejudgment interest and USD $5.6 million in civil
money penalties.
The SEC’s allegations extend further, claiming that
Bittrex instructed crypto issuers to remove public statements that could
potentially suggest their transactions might have violated the regulations.
However, the exchange neither acknowledged nor refuted the claims in the
settlement.
The terms of the settlement are
reportedly subject to approval by the bankruptcy court, considering Bittrex’
recent bankruptcy filing. Thus, the exchange has a 90-day window to pay the
fine, failure to which the regulator could reportedly bring further charges against the
company.
The SEC’s Enforcement
Director, Gurbir Grewal, said: “Today’s settlement makes clear that you
cannot escape liability by simply changing labels or altering descriptions
because what matters is the economic realities of those offerings.”
Bankruptcy Filing
Based in Seattle,
Bittrex filed
for bankruptcy in May
following allegations by the SEC regarding its operations of an
unregistered securities exchange. The company terminated its activities in the
US on April 30, clarifying that the bankruptcy filing will not affect its
global operations offered through Bittrex Global, which caters to customers
outside the US.
Amidst the bankruptcy, Bittrex said that it still holds cryptocurrency assets belonging to US
customers who had not withdrawn their funds prior to April 30, according to a
report by Reuters. Filed in a court in Wilmington, Delaware, Bittrex’s
bankruptcy filing shows that the company has between USD $500 million and USD
$1 billion in both
assets and liabilities.
Bittrex’s case is not an
isolated incident, as the SEC has targeted other major cryptocurrency
exchanges, including Coinbase and Binance, with similar charges. In the past, the regulator
has stated that cryptocurrencies are securities that must be
brought under its purview.
