The U.S. Securities and Exchange Commission (SEC) has charged Bittrex and its former CEO and co-founder William Shihara with operating an unregistered national securities exchange, merchant, and clearing agency.
Bittrex Global GmbH, Bittrex’s foreign affiliate, was also charged by the SEC with neglecting to register as a national securities exchange in connection with its operation of a single shared order book alongside Bittrex.
In its complaint, the SEC identifies Omise Go (OMG), Algorand (ALGO), Dash (DASH), Tokencard (TKN), i-House Token (IHT), and Naga (NGC) as securities.
In a new press release, the SEC alleges that Bittrex has violated securities laws by facilitating the purchase and sale of crypto assets since 2014.
According to the SEC, Bittrex generated at least $1.3 billion in revenue from 2017 through 2022 while serving US investors as a merchant, exchange, and clearing agency without registering any of these activities with the Commission.
In addition, the complaint alleges that Bittrex and Shihara coordinated with issuers to remove “problematic statements” from public channels that could have prompted regulators, such as the SEC, to conduct investigations.
Gary Gensler, chairman of the SEC,
“Today’s action demonstrates once more that the crypto markets are plagued by a lack of regulatory compliance, not a lack of regulatory clarity…
As alleged in our complaint, Bittrex and the issuers it worked with were aware of the applicable regulations, but went to great extent to circumvent them by directing issuer-applicants to’scrub’ offering materials of information indicating that certain crypto assets were securities.
In addition, as alleged, Bittrex failed to register and comply with United States securities laws as an exchange, broker-dealer, and clearing agency. The fundamental economic realities of the offerings and Bittrex’s conduct were unaffected by superficial modifications. Today, we hold Bittrex responsible for its noncompliance.”
