The SEC Sues Bittrex for Operating Unregulated Securities Exchange

by Tony Mormile

Bittrex is being accused of offering securities without being registered to do so.

Key Takeaways

  • The SEC is suing Bittrex and its former CEO, William Shihara.
  • The agency is accusing Bittrex of operating an unregulated securities exchange, broker, and clearing agency.
  • The SEC also claimed that Bittrex instructed crypto projects seeking enlistment to scrub public statements they'd previously made which could bring the attention of regulatory agencies.

The SEC’s war on crypto rages on. The regulator filed civil charges today against Bittrex for operating as a national securities exchange without being properly registered.

Scrubbing Problematic Statements

Yet another crypto company has fallen prey to the SEC’s predatory eye.

The U.S. Securities and Exchange Commission announced today that it was charging crypto exchange Bittrex and former CEO William Shihara for allegedly operating an unregistered national securities exchange, broker, and clearing agency. The SEC is also suing Bittrex foreign affiliate, Bittrex Global, for failing to register as a national securities exchange.

The SEC claimed in its complaint that Bittrex facilitated the buying and selling of cryptocurrencies which the agency believes to be securities—including OMG, DASH, ALGO, TKN, NGC, and IHT. 

According to the SEC, Bittrex and Shihara instructed the teams behind these cryptocurrencies to scrub “problematic statements” they’d publicly made in the past which they believed could bring the attention of a regulatory agency—such as the SEC itself. Price predictions, expectations of profit, and other investment-related terms were ordered for deletion before the assets could be listed on Bittrex. 

“Today’s action, yet again, makes plain that the crypto markets suffer from a lack of regulatory compliance, not a lack of regulatory clarity,” stated SEC Chair Gary Gensler. “As alleged in our complaint, Bittrex and issuers that it worked with knew the rules that applied to them but went to great lengths to evade them by directing issuer-applicants to ‘scrub‘ offering materials of information indicating that certain crypto assets were securities.”

Bittrex Global responded to the civil lawsuit by claiming that it never served any U.S. customers and had “taken pains” to forbid U.S. residents from using the exchange. It also criticized the SEC for not seeking to engage with the company before suing. “Bittrex Global was willing to work productively with the SEC—as we do with all regulators—to explain our position. It has become clear that the SEC is not interested in such discussions.”

Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and other crypto assets.

The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.

SEC and CFTC Charge FTX’s Nishad Singh

News Mar. 1, 2023

FTX’s chief engineer, Nishad Singh, was hit with lawsuits from both the SEC and the CFTC shortly after pleading guilty to six criminal charges yesterday. Aiding and Abetting Fraud Another...

SEC and CFTC Charge FTX’s Nishad Singh

“Paternalistic and Lazy”: SEC Commissioner Blasts Agency Crackdown...

News Feb. 10, 2023

SEC Chair Gary Gensler’s latest move—forcing Kraken to shut down its staking services—is being met with criticism from within the agency itself. The SEC Is to Blame Not everyone at...

“Paternalistic and Lazy”: SEC Commissioner Blasts Agency Crackdown...

SEC Files “Totally Counterproductive” Charges Against Gemini and G...

News Jan. 13, 2023

The SEC is accusing both Gemini and Genesis of offering unregistered securities to retail investors. “Once Again Late to the Game” The Genesis situation keeps getting worse. Yesterday the Securities...

SEC Files “Totally Counterproductive” Charges Against Gemini and G...