Bittrex crypto exchange agreed to pay $24 million in settlement for failure to register with the SEC
In May, we covered the story about Bittrex after the Seattle-based startup filed for bankruptcy following regulators’ crackdown on the crypto industry. But the bankruptcy has not stopped the Securities and Exchange Commission (SEC) from continuing its investigation of the company’s operations.
Then in April, the SEC took legal action against both Bittrex Inc and its former CEO, William Shihara, stating that they had been operating an unregistered national securities exchange, broker, and clearing agency. Also in the same month, Bittrex laid off 83 employees amid what it described as unfavorable macroeconomic market conditions.
On Thursday, Bittrex announced that it has agreed to settle with the SEC for $24 million to address the claims made against it, Reuters reported, citing a filing in Seattle federal court on Thursday. The decision comes as a response to allegations that the crypto exchange failed to properly register with the regulatory body.
In a statement, SEC Enforcement Director Gurbir Grewal said the 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.”
The company and Shihara also agreed that they will be subject to an order preventing them from violating U.S. securities laws. However, it’s worth noting that they did not explicitly admit to the SEC’s allegations.
Shihara called the settlement “a good outcome.” He added, “It’s vital that our country strikes a balance between fostering innovation, encouraging entrepreneurs, and the need to protect consumers, and I hope today’s proposed settlement helps move that forward.”
A Bittrex spokesperson said the firm was “delighted” to have reached a settlement and would be able to say more after the court has approved the resolution.
Bittrex was founded in 2014 by three cybersecurity engineers: Bill Shihara (Co-founder & CEO), Richie Lei, Rami Kawach, and Ryan Hentz. The exchange is the premier US-based blockchain platform, providing lightning-fast trade execution, dependable digital wallets, and industry-leading security practices. Our mission is to help advance the blockchain industry by fostering innovation, incubating new and emerging technology, and driving transformative change. Bittrex, Inc. is not a regulated exchange under U.S. securities laws.