Bittrex Was Targeted By The SEC Before The US Crash
- The SEC’s enforcement team informed Bittrex in March that the agency would propose that it suits the company for purported breaches of investor protection laws.
- When the Wells notice arrived, the company was already planning to shut its US operations.
- Bittrex’s inability to comply with SEC standards was due to the agency’s failure to provide clear crypto regulations in the first place.
According to the Wall Street Journal, the US Securities and Exchange Commission’s (SEC) law enforcement division has suggested that the SEC prosecute cryptocurrency exchange Bittrex for breaching investor protection rules.
Bittrex was originally the country’s largest digital asset trading platform. Its tumultuous domestic history is coming to an end, with a regulatory threat and a determination to depart the US permanently.
Bittrex general counsel David Maria said that in March, law enforcement warned Bittrex of the SEC’s potential proceedings.
The SEC charged the company with violating the law by functioning as an exchange, broker-dealer, and clearinghouse without registering with the regulator in its Wells Notice.
The enforcement team notified Bittrex about probable SEC action in March, according to Bittrex’s general counsel David Maria. The Seattle-based crypto business had already begun the process of closing down its US operations at the time, according to the attorney.
The SEC said in the notice of probable enforcement action that Bittrex violated laws by operating as an exchange, broker-dealer, and clearinghouse without registering with the regulator.
The crypto company discovered that there was no way to comply with SEC laws without effectively stopping all revenue-generating operations in the nation.
Attorney Maria emphasized that Bittrex’s inability to comply with SEC standards was due to the agency’s failure to provide clear crypto regulations in the first place.
When Bittrex received the notification, it was already planning to shut its U.S. operations, according to Maria, noting the difficulties of cooperating with US authorities who had launched enforcement action against over 100 crypto defendants in the last six years.
The verdict demonstrates how strong regulatory enforcement might push part of the sector offshore, as well as how authorities are now targeting crypto exchanges, like Coinbase, after years of pursuing firms that produced digital currency listed on such platforms.
The SEC also recently ordered Kraken, the second-largest digital-asset exchange in the United States, to discontinue services that enabled users to receive a dividend on specific tokens.
According to SEC Chair Gary Gensler, most of the crypto business has ignored investor protection standards that his agency enforces. He has said that exchanges such as Bittrex should register with the SEC in order to disassemble their operations, remove conflicts of interest, and seem more like regular stock exchanges.
Nonetheless, Gensler’s zealous application of the law elicited conflicting opinions. US Congressman Warren Davidson announced the introduction of new legislation. The proposed bill’s goal is to remove the SEC Chairman and replace him with a director.
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