SEC Charges Bittrex for Unregistered Securities Trading

The US Securities and Exchange Commission (SEC) has charged crypto asset trading platform Bittrex and its co-founder and former CEO William Shihara for operating an unregistered national securities exchange, broker, and clearing agency. In a separate charge, Bittrex Global is also facing charges for its operation of a single shared order book with Bittrex.

The SEC has filed four charges of Exchange Act violations against the companies and Shihara in the US District Court Western District of Washington. According to the SEC’s complaint, tokens traded on Bittrex, including OMG, Dash, Algorand, Monolith, Naga, and IHT, are securities. The agency has been criticized in the past for its “regulation by enforcement” approach, which claims tokens are securities only at the time of filing complaints and not before.

The SEC’s charges against Bittrex highlight the regulatory uncertainty surrounding the crypto industry, especially when it comes to determining whether digital assets qualify as securities. The agency has previously filed charges against several companies for unregistered securities trading, including Telegram and Ripple.

Bittrex is not the first cryptocurrency trading platform to face legal action from the SEC. In 2019, the agency took legal action against EtherDelta, a decentralized exchange, for operating an unregistered securities exchange. The SEC has also previously warned investors about the risks associated with investing in cryptocurrencies and initial coin offerings (ICOs).

Bittrex has been a prominent player in the crypto industry since its launch in 2014. The platform currently supports trading in over 300 cryptocurrencies, making it one of the largest crypto exchanges in the world. However, the SEC’s charges against the company and its former CEO could have significant implications for the broader crypto industry, especially when it comes to determining whether certain digital assets qualify as securities.

In response to the SEC’s charges, Bittrex issued a statement saying that it had been in “close communication” with the agency over the past two years and had been “cooperating with them in an effort to address their concerns.” The company also said that it “disagrees” with the SEC’s assessment that certain tokens traded on its platform are securities and plans to “vigorously defend” itself against the charges.

In conclusion, the SEC’s charges against Bittrex and its former CEO highlight the ongoing regulatory uncertainty surrounding the crypto industry. While the agency has taken legal action against several companies for unregistered securities trading, questions remain about how to determine whether certain digital assets qualify as securities. The outcome of this case could have significant implications for the broader crypto industry and how it is regulated moving forward.


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Bittrex Faces Potential Legal Action from US SEC

The US Securities and Exchange Commission’s (SEC) enforcement division is reportedly considering recommending legal action against Bittrex, a Seattle-based cryptocurrency exchange, over alleged violations related to investor protection. Bittrex’s general counsel, David Maria, confirmed that the enforcement unit had notified the company about the potential action in March. By that time, Bittrex had already begun the process of winding down its US operations.

The SEC’s notice of potential enforcement action, also known as a Wells notice, stated that Bittrex had violated laws by operating as an exchange, broker-dealer, and clearinghouse without registering with the regulator. In late 2022, Bittrex reportedly discussed with the SEC how to register its operations but found that there was no opportunity to comply with the SEC’s rules without essentially ceasing all of its revenue-producing activities in the country.

Bittrex has been operating in the US since 2014 and has been one of the larger cryptocurrency exchanges in the country. The exchange has faced regulatory scrutiny in the past, including in 2018 when it was denied a license to operate in the state of New York.

The SEC’s potential legal action against Bittrex comes amid increasing regulatory scrutiny of the cryptocurrency industry in the US. The SEC has been actively targeting cryptocurrency exchanges and other players in the industry for non-compliance with securities laws and regulations.

Many in the cryptocurrency industry have called for clearer regulatory guidelines to provide more certainty and stability to the market. The lack of regulatory clarity has been cited as a barrier to institutional adoption of cryptocurrencies, which some believe could help to legitimize the industry and bring in more investment.

In response to the potential legal action from the SEC, Bittrex has said that it is committed to complying with all applicable laws and regulations and that it has been working with regulators to ensure compliance. The exchange has also stated that it will continue to operate in other jurisdictions outside of the US.

In conclusion, the potential legal action from the SEC against Bittrex underscores the increasing regulatory scrutiny of the cryptocurrency industry in the US. While many in the industry have called for clearer guidelines, regulators are taking a more active approach to enforcement, which could have significant implications for the industry going forward. Bittrex’s decision to wind down its US operations highlights the challenges faced by cryptocurrency exchanges in navigating the complex and evolving regulatory landscape.


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Bittrex to Shut Down U.S. Platform

Cryptocurrency exchange Bittrex will close its U.S. platform on April 30, according to an announcement from the company on Friday. After nine years of operation, Bittrex co-founder and CEO Ritchie Lai stated that the current U.S. regulatory and economic environment made it “economically unviable” for the exchange to continue operating in the country.

Lai cited unclear regulatory requirements that are enforced without appropriate discussion or input, resulting in an uneven competitive landscape as the reasons behind the closure. He added that operating in the U.S. was no longer feasible for Bittrex.

Despite the shutdown of its U.S. platform, Lai assured customers that all their funds are safe and available for withdrawal. The closure will not affect Bittrex Global, which operates in Europe, Canada, and South America, among other locales, and will remain open for trading.

Bittrex’s decision to shut down its U.S. platform is not the first time a crypto exchange has faced regulatory hurdles. In recent weeks and months, U.S. regulators have increased their oversight of crypto-related companies. Coinbase recently disclosed receiving a Wells Notice from the U.S. Securities and Exchange Commission (SEC), while Kraken paid a $30 million fine in a settlement with the same agency after shuttering its crypto staking service.

Binance and its CEO and founder Changpeng Zhao were also recently named in a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC). The complaint alleges the offering of unregistered crypto derivatives products in the U.S.

The crypto industry has been grappling with regulatory challenges in the U.S., with some companies choosing to exit the market altogether. However, other companies, like Bittrex Global, continue to operate and expand their reach in other parts of the world.

Bittrex Global operates in over 100 countries and recently launched a new platform for institutional investors. The exchange’s closure of its U.S. platform may be a strategic decision to focus on expanding its operations elsewhere.

The crypto industry is still in its early stages, and regulatory challenges are expected to persist. The industry’s stakeholders will need to work with regulators to find a balance between innovation and compliance to ensure the healthy growth of the industry.


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Bittrex to Wind Down US Operations

Cryptocurrency exchange Bittrex has announced that it will be winding down its operations in the United States due to a challenging regulatory and economic environment. The company’s co-founder and CEO, Richie Lai, stated that as the cryptocurrency ecosystem evolved, regulatory requirements have become increasingly “unclear” and “enforced, without appropriate discussion or input,” leading to an uneven competitive landscape. This environment has made it economically unviable for Bittrex to continue its operations in the United States.

Founded in 2014 by three cybersecurity engineers, Bittrex offered features such as a full-service API, near-instant atomic transactions, wallet infrastructure, and offline cold wallet solutions. However, the winding down of Bittrex’s US operations is a reminder of the challenges faced by cryptocurrency businesses navigating an uncertain regulatory environment.

The company’s founders have decided to focus on helping Bittrex Global succeed outside the United States. Bittrex clarified that US customers do not have to worry about the safety of their funds, as all of their capital is safe and available for withdrawal. The platform shared that it will permit trading until April 14, 2023, but advised customers to withdraw all funds by April 30, 2023.

Bittrex’s decision to wind down its US operations is not an isolated incident. On March 3, Ripple CEO Brad Garlinghouse warned that the Securities and Exchange Commission’s regulatory approach puts the US at “severe risk” of missing out on being an attractive hub for the next evolution of blockchain and crypto innovation. In a Bloomberg interview, Garlinghouse suggested that the crypto industry has “already started moving outside” of the US because the country’s crypto regulation is “behind” other nations like Australia, Japan, the United Kingdom, Singapore, and Switzerland.

The regulatory environment for cryptocurrencies in the US has been a subject of debate and discussion for some time. While some states, such as Wyoming, have taken a more lenient approach to cryptocurrency regulation, others have been more restrictive. In addition, the Securities and Exchange Commission (SEC) has been criticized for its lack of clarity regarding which cryptocurrencies qualify as securities and which do not. This lack of clarity has resulted in several high-profile legal battles between the SEC and cryptocurrency companies.

Despite these challenges, the cryptocurrency industry continues to grow and evolve. While Bittrex may be winding down its US operations, other exchanges and companies are likely to step in to fill the void. It remains to be seen how the regulatory environment for cryptocurrencies will evolve in the coming years, but one thing is clear: the demand for cryptocurrencies and blockchain technology shows no signs of slowing down.


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Crypto Firms Make Job Cuts Amidst Ongoing Crypto Winter

This week, many cryptocurrency companies have eliminated jobs in response to the current crypto winter. However, these companies have chosen to keep “impactful” people on staff as they prepare for a “longer slump.”

At least 216 jobs were cut across three different cryptocurrency companies. These companies are open-source software laboratory Protocol Labs, blockchain data firm Chainalysis, and cryptocurrency exchange Bittrex. Each of these companies reduced their workforce by 89, 83, and 44 employees, respectively.

In a blog post dated February 3, Juan Benet, CEO of Protocol Labs, the firm that introduced Filecoin (FIL), said that the company will be cutting jobs because it needed to concentrate its workforce “against the most impactful and business-critical projects.”

He claimed that the firm had come to the conclusion that it was in the best position to “weather this protracted winter” by eliminating “89 jobs,” which is equivalent to around 21% of its staff.

Given that the cryptocurrency business is now experiencing “very tough” conditions, Benet said that the firm should “plan for a lengthier slump.”

Meanwhile, on February 1, Bittrex CEO Richie Lai emailed the firm’s workers to notify them that the company would be reducing its employment in order to “maintain the long-term health” of the business.

On February 2, the email was shared inappropriately on Twitter. Lai claimed that despite the fact that the leadership team has been “working vigorously” over the last several months to decrease expenditures and boost efficiency, the efforts have not achieved the “results required.” Lai added that the efforts have not delivered the “results necessary.”

Lai went on to say that the current state of the market necessitated a reevaluation of the company’s approach and a readjustment of its “investments with the new economic climate.”

On February 2, 2018, records pertaining to employment in the state of Washington indicated that Bittrex had eliminated 83 positions.

According to statements made by Maddie Kennedy, director of communications at Chainalysis, to Forbes on February 1, the firm let off 44 of its 900 workers, which represents around 4.8% of the workforce. Kennedy said that those who were let go were “mainly in sales” at the company.

The announcement of these layoffs follows reports that in January, at least 2,900 employees were let go across 14 different cryptocurrency organisations.

Among those companies, Coinbase saw the most personnel reductions, with 950 employees losing their jobs on January 10th.

During this time, rival cryptocurrency exchanges, Luno, and Huobi each laid off about 500 employees, 330 employees, and 320 employees, respectively.


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US Treasury Fines Bittrex Exchange $29m for Multi-Year Sanctions Violation

Washington-based cryptocurrency trading platform, Bittrex Has been fined the sum of $29 million by the United States Treasury Department through the Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN). 


The fone, tagged as the single largest levied by the OFAC on a digital currency trading platform, became necessary, considering Bittrex failed to implement adequate compliance programs, thus helping some of its users to evade established sanctions. 

According to the OFAC announcement, the trading platform “failed to prevent persons apparently located in the Crimea region of Ukraine, Cuba, Iran, Sudan, and Syria from using its platform to engage in approximately $263,451,600.13 worth of virtual currency-related transactions between March 2014 and December 2017.”

The regulator noted that preventing these banned users would have been easy if the exchange prevented their registration based on their IP addresses at the point of registration. The FinCEN violation involved failure on the part of the trading platform to institute appropriate Anti-Money Laundering (AML) measures, thus creating a weak channel for the laundering of illicit financial proceeds.

“When virtual currency firms fail to implement effective sanctions compliance controls, including screening customers located in sanctioned jurisdictions, they can become a vehicle for illicit actors that threaten U.S national security,” said OFAC Director Andrea Gacki. “Virtual currency exchanges operating worldwide should understand both who—and where—their customers are. OFAC will continue to hold accountable firms, in the virtual currency industry and elsewhere, whose failure to implement appropriate controls leads to sanctions violations.”

The US Treasury has been more alive towards cryptocurrency service providers all year long, first coming into the limelight in May when it banned crypto mixer, and subsequently when it added Tornado Cash to its list. 

While the industry made no fuss about the Blender ban, that of Tornado Cash has been received with so many objections, all of which have spurred industry giants like Coinbase Global Inc to fund targeted lawsuits and advocacy stunts.

Image source: Shutterstock


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Dubai to benefit from expanding crypto market, Bittrex Global CEO says

The United Arab Emirates (UAE) and Dubai are among the friendliest jurisdictions for the cryptocurrency industry, according to Stephen Stonberg, CEO of Bittrex Global crypto exchange.

Dubai is likely to benefit from the expanding crypto market in the Middle East as local regulators increasingly accept blockchain-related technologies, Stonberg said in a Sunday Bloomberg interview.

The UAE and Dubai are “doing all the right things and they’re going to attract a lot of regional projects” in the cryptocurrency industry, Stonberg said. He stated that these jurisdictions provide a “great place” to set up a token project or run a cryptocurrency exchange, largely thanks to the region’s status as a tax haven.

According to data from the Tax Justice Network, the UAE became one of the world’s largest fastest-growing tax havens in March 2021 alongside Switzerland and Bermuda.

“I think Dubai is going to do fantastically well,” Stonberg said, adding that Bittrex now expects further expansion and more clients in the region. Bittrex Global is a global crypto trading platform for the Bittrex exchange, one of the largest crypto exchanges in the United States. 

The global exchange was officially launched in September 2019 and is headquartered in Liechtenstein. Last year, Bittrex Global received a digital asset license to operate its crypto exchange under the supervision of the Bermuda Monetary Authority.

Related: Crypto is no longer in the early adoption stage, Bittrex Global CEO says

The UAE has been cementing its presence in the digital asset industry recently, with Minister of Economy Abdulla Bin Touq Al Marri declaring in April that cryptocurrencies and asset tokenization will be key to the country’s plans to double its economy in 10 years. In July, the UAE joined the global central bank digital currency (CBDC) race.

The Dubai Financial Services Authority, the financial regulatory agency for the Dubai International Financial Centre, also initiated several crypto-related regulations this year, intending to adopt a ​​regulatory framework for diverse digital assets in 2021.