The U.S. Securities and Exchange Commission (SEC) has reached a significant settlement with cryptocurrency exchange Bittrex and its co-founder, William Shihara. The SEC’s enforcement action revolves around allegations that Bittrex operated as an unregistered exchange, broker, and clearing agency. The exchange has consented to pay a total of $24 million in penalties as part of the settlement, pending court approval.
The fines encompass disgorgement of $14.4 million, prejudgment interest of $4 million, and a civil penalty of $5.6 million. The settlement’s terms require Bittrex to neither confirm nor deny the SEC’s allegations publicly, nor make statements that undermine the factual basis of the charges.
The SEC’s Director of Enforcement, Gurbir S. Grewal, highlighted Bittrex’s attempts to evade federal securities laws by altering online statements of token issuers.
Today we announced that crypto asset trading platform Bittrex Inc. and its co-founder and former CEO, William Shihara, agreed to settle charges that they operated an unregistered national securities exchange, broker, and clearing agency.
— U.S. Securities and Exchange Commission (@SECGov) August 10, 2023
The settlement follows Bittrex’s closure of its U.S.-based exchange due to economic inviability amidst regulatory uncertainties. The SEC’s enforcement action occurred shortly after and identified certain cryptocurrencies, such as Algorand and Dash, as securities.
Bittrex’s co-founder and CEO, Richie Lai, emphasized the evolving regulatory landscape in the crypto ecosystem, where unclear and inconsistently enforced requirements create an uneven competitive environment.
