Bittrex has settled with the Securities and Exchange Commission (SEC) regarding charges that it operated an unregistered securities exchange. Bittrex’s foreign operation, Bittrex Global GmbH has also agreed to settle similar charges. Bittrex has agreed to pay a total penalty of $24 million. As part of the settlement, the defendants neither admit nor deny the SEC’s allegations.
The crypto exchange was hit with the enforcement action last April when the SEC declared that Bittrex had been selling sold crypto securities to US investors. From 2017 through 2022, Bittrex is said to have earned at least $1.3 billion in revenues from transaction fees.
The SEC’s complaint claimed that Bittrex operated as an unregistered broker, change and clearing entity. The complaint also alleges that Bittrex and co-founder and former CEO, William Shihara, who was the company’s CEO from 2014 to 2019, directed issuers delete from public channels certain “problematic statements”.
“For years, Bittrex worked with token issuers to ‘scrub’ their online statements of any indicia that they were investment contracts—all in an effort to evade the federal securities laws. They failed,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “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. I am grateful to the SEC staff for aggressively pursuing non-compliance in the crypto industry, resolving this matter, and bringing additional relief to harmed investors.”
Bittrex and Bittrex Global agreed to pay, on a joint and several basis, disgorgement of $14.4 million, prejudgment interest of $4 million, and a civil penalty of $5.6 million for a total monetary payment of $24 million.
