The US Securities and Exchange Commission (SEC) has filed a lawsuit against Bittrex, a cryptocurrency exchange, and its former CEO, William Shihara, for allegedly operating an unregistered Securities Exchange. Bittrex is also being sued for failing to register as a national Securities Exchange. The SEC alleges that Bittrex facilitated the buying and selling of cryptocurrencies that the agency believes to be Securities, such as OMG Network, Dash, Algorand, TKN, NGC, and IHT.
According to the SEC, Bittrex and Shihara were aware of the rules that applied to them but went to great lengths to evade them. The agency claims that Bittrex and the issuers it worked with knew that certain cryptocurrencies met the definition of Securities under the federal securities laws, yet failed to register them with the SEC or follow other necessary procedures.
Furthermore, the SEC accuses Bittrex and Shihara of instructing the teams behind these cryptocurrencies to scrub problematic statements they had made in the past before they could be listed on Bittrex. The SEC believes that this was an attempt to conceal the Securities status of these cryptocurrencies and evade regulatory scrutiny.
The lawsuit also names Bittrex Global, the foreign affiliate of Bittrex. In response, Bittrex Global has claimed that it never served any US customers and had taken steps to forbid US residents from using the exchange. Bittrex criticized the SEC for not seeking to engage with the company before suing, claiming that it had attempted to work with the agency to ensure compliance.
The SEC's action against Bittrex is the latest in a series of regulatory moves against cryptocurrency exchanges and projects. The agency has been increasingly active in enforcing securities laws in the cryptocurrency space, which has led to heightened scrutiny and regulatory action against companies operating in the industry.
In conclusion, the SEC's lawsuit against Bittrex and its former CEO, William Shihara, for allegedly operating an unregistered Securities Exchange and failing to register as a national Securities Exchange, highlights the agency's continued focus on the cryptocurrency industry. It remains to be seen how the case will play out, but it is clear that the SEC is taking a strong stance on ensuring that companies operating in the cryptocurrency space comply with securities laws.