Bittrex has reached an agreement to pay a $24 million settlement in response to allegations from the U.S. Securities and Exchange Commission (SEC) that the cryptocurrency exchange failed to register with the agency. The SEC had filed a lawsuit against Bittrex Inc and its former CEO, William Shihara, accusing them of operating an unregistered national securities exchange, broker, and clearing agency.
The SEC also claimed that Bittrex Global GmbH, the exchange’s foreign affiliate, did not register as a national securities exchange despite operating a shared order book with Bittrex. Bittrex Inc had previously filed for bankruptcy, and the settlement deal mandates the payment of a $5.6 million fine and the surrender of $18.4 million in alleged illicit profits once a liquidation plan is filed in the bankruptcy case.
As part of the settlement, the companies and Shihara agreed to an order that prohibits them from violating U.S. securities laws, although they did not admit to the SEC’s allegations. A spokesperson for Bittrex expressed satisfaction with the settlement and indicated that more details would be provided after the court’s approval.
The SEC’s lawsuit claimed that Shihara collaborated with crypto asset issuers seeking to list their tokens on Bittrex’s platform, deleting public statements that might attract regulatory scrutiny. The SEC’s Enforcement Director, Gurbir Grewal, emphasized that the settlement reinforces the principle that changing labels or descriptions cannot evade liability; the economic realities of the offerings matter.
Shihara, in response to the settlement, deemed it a positive outcome, highlighting the importance of striking a balance between fostering innovation, supporting entrepreneurs, and safeguarding consumers.