Bittrex Agrees to $24 Million Settlement Following Allegations of SEC Rule Violations

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In the aftermath of allegations surrounding rule violations, Bittrex, the now-defunct crypto exchange operator, along with its global affiliate, has agreed to a settlement of $24 million.

This resolution is a direct response to accusations that, for several years, the firms operated without the necessary registration with the Securities and Exchange Commission (SEC) while serving US clientele.

The Accusations: A Five-Year Controversy

From 2017 up until 2022, the SEC made the claim that Bittrex functioned as an unregistered entity in three distinct roles: securities exchange, broker, and clearing agency.

This allegedly allowed them to rake in a staggering revenue of over $1.3 billion. Alongside the firm, the SEC’s April lawsuit also targeted co-founder William Shihara and the international branch, Bittrex Global GmbH.

A “Good Outcome” for Shihara?

While neither admitting nor denying the allegations, Shihara, who served as the CEO from 2014 to 2019, termed the settlement as “a good outcome.” The former executive voiced his hopes that this resolution might strike the much-needed balance — ensuring investor protection while still encouraging industry innovation.

Earlier Allegations of Regulatory Evasions

The SEC’s past lawsuit suggested a collaborative effort between Bittrex and Shihara with other asset issuers. This collaboration reportedly aimed at removing any content that might invite unwanted attention from the regulatory bodies.

The former crypto exchange had once been firm in its stance to challenge these allegations, outrightly denying the offering or trading of securities or investment contracts via its platform.

The trajectory of Bittrex took a downturn in May when it declared bankruptcy after halting its operations in the US. The crypto world at large remains in the spotlight, with Chair Gary Gensler, emphasizing that many tokens fall under the purview of the SEC.

Even with the recent win brought forth by Ripple in its lawsuit, it would seem to have had very little effect on the SEC’s Gensler.