SEC settles with Bittrex and its ex-CEO for $24M following ‘scrubbing’ charges News ▸ US ▸ Bittrex ▸ Regulation
SEC settles with Bittrex and its ex-CEO for $24M following ‘scrubbing’ charges
The crypto exchange also faced broader charges around securities violations.
2 min read
Updated: Aug. 10, 2023 at 11:45 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The U.S. Securities and Exchange Commission (SEC) said on Aug. 10 that it has reached a $24 million settlement with Bittrex and its former CEO, William Shihara.
The SEC made numerous allegations against Bittrex in its original claim. Notably, it alleged that coin issuers seeking exchange listings from Bittrex were instructed to remove “problematic statements” that could raise regulatory concerns.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, said:
“For years, Bittrex worked with token issuers to ‘scrub’ their online statements of any indicia that they were investment contracts—all in an effort to evade the federal securities laws.”
The SEC alleged more broadly that the company operated as an unregistered national securities exchange, broker, and clearing agency. More specifically, the SEC alleged that Bittrex and Shihara provided services to U.S. investors involving crypto assets that the regulator believed were offered and sold as securities.
The SEC also alleged that Bittrex’s foreign affiliate, Bittrex Global, failed to register as a national securities exchange and said the firm has agreed to settle.
The defendants are not required to confirm or deny the charges.
Settlement amounts to $24M
As part of the settlement, Bittrex and Bittrex Global have agreed to pay charges amounting to $24 million. That total includes disgorgement charges of $14.4 million, prejudgment interest of $4 million, and a civil penalty of $5.6 million.
Bittrex, Bittrex Global, and Shihara will also be restrained from violating certain sections of the Securities Exchange Act of 1934. It does not appear that this will prevent Bittrex from operating internationally, though the company has already halted U.S. operations.
The SEC initially charged the crypto exchange and former CEO on April 17, 2023. While Bittrex announced its U.S. closure in March before SEC’s charges became public, its U.S. arm additionally filed for bankruptcy in June following those charges.
This settlement takes place alongside numerous other securities-related developments. Ripple reached a partial victory in its SEC case in July, while the SEC initiated two other cases against Binance and Coinbase in June.
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Mike Dalton
Before transitioning to crypto writing in 2018, Mike studied library and information sciences. Currently, he resides on Canada's West Coast.
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Bittrex
Founded in 2014 by three cybersecurity engineers, Bittrex is a global leader in the blockchain revolution.
