Another crypto firm, Bittrex, bites the dust in the SEC’s continued clampdown on major players in the crypto industry amidst regulatory uncertainty. The regulator has been known to come hard at these crypto firms because it believes they aren’t toeing an almost non-existent regulatory framework.
Bittrex Succumbs To SEC
In a press release dated August 10, the United States Securities and Exchange Commission (SEC) announced that crypto exchange Bittrex and its former CEO William Shihara have agreed to a $24 million monetary settlement with the regulator. According to the statement, Bittrex’s international affiliate company Bittrex Global GmbH also agreed to settle the charge of failing to register as a national securities exchange.
The SEC had alleged that the crypto exchange and its former CEO operated an “unregistered national securities exchange, broker, and clearing agency.” It argued that the exchange violated securities laws when it offered and allowed US investors to invest in crypto assets, which it deems as securities (The SEC has continued to allege that tokens like MATIC, SOL, ADA, and XRP are securities).
Furthermore, the agency accused the firm and its former CEO of going as far as to cover their tracks in order to escape regulatory scrutiny. The SEC’s complaint stated Shihara directed token issuers, who wanted their tokens listed on the exchange, to remove “problematic statements,” which could lead any regulator to investigate whether or not the company offered and sold securities on the platform.
The settlement news may come as a surprise considering many thought the SEC was going to experience a pushback from the crypto exchange. This is because Bittrex had earlier argued that the SEC had no authority to regulate tokens traded on its platform due to a lack of clear-cut law by Congress authorizing the regulator to do so.
SEC Might Be Killing The Crypto Economy
Besides Bittrex, the SEC is currently embroiled in legal battles against the world’s biggest cryptocurrency exchanges, Binance and Coinbase. Similarly, it accuses these exchanges of offering and selling securities on their platform without registering with the agency.
While many may argue that the SEC is simply doing its job of protecting the interests of US investors, others may take a different point of view by arguing that the SEC is simply killing the Web3 economy in the country. For instance, Bittrex, before filing bankruptcy in the US, had earlier shut down its US operations due to “continued regulatory uncertainty.”
This unfavorable regulatory environment is undoubtedly one of the reasons why some other crypto firms have also chosen to take their operations abroad instead of being domiciled in the US, especially with the fact that other countries are putting crypto-friendly guidelines in place on how crypto exchanges should conduct their operations.
For this reason, Congress needs to step in and pass clear-cut laws that stipulate whether or not crypto exchanges fall under the purview of the SEC, and if yes, it needs to also address whether crypto assets are securities or not.
Total market cap down to $1.133 trillion amid regulatory concerns | Source: Crypto Total Market Cap on Tradingview.com
Featured image from Business Insider, chart from Tradingview.com