US crypto exchange Bittrex faces potential action from SEC: Report
By the time Bittrex received a notification of prospective action from the SEC, it had already begun to wind down operations, according to the general counsel.
Despite plans to cease local operations, the American securities regulator may take action against the cryptocurrency exchange Bittrex, which is based in the United States.
According to a Wall Street Journal article published on April 16, the enforcement section of the U.S. Securities and Exchange Commission (SEC) is leaning toward recommending that the organization sue Bittrex for suspected investor protection violations.
According to Bittrex corporate counsel David Maria, the enforcement unit warned Bittrex about probable SEC action in March. The Seattle-based cryptocurrency company had already begun to wind down its U.S. operations at that point, according to the lawyer.
The SEC said that Bittrex had broken the law by operating as an exchange, broker-dealer, and clearinghouse without registering with the watchdog in the notice of potential enforcement action, or Wells notice.
The SEC and Bittrex discussed how to register their business in late 2022, according to Bittrex's general counsel. The cryptocurrency company discovered that there was no way to abide by the SEC's regulations without essentially ending all of its revenue-generating operations in the nation.
Attorney Maria emphasized that Bittrex's inability to adhere to SEC standards was caused by the agency's initial failure to establish clear regulations for cryptocurrencies. He declared:
“The lack of regulatory clarity here results in substantial costs and no certainty as to what can and can’t be offered.”
Since the business is ceasing operations in the US, Maria said Bittrex is unsure whether the SEC would bring a lawsuit. In the event that the government decided to act, Bittrex will go to court unless the regulators "came with a reasonable settlement offer," according to the attorney.
The information was released shortly after Bittrex declared that all operations would cease in the United States on March 31 due to the difficult legal and economic climate. Customers in the US were instructed by the exchange to remove their money by April 30, 2023.
Bittrex had various problems at home before deciding to leave the country. Bittrex agreed to pay more than $29 million in fines from the Office of Foreign Assets Control and Financial Crimes Enforcement Network of the U.S. Department of the Treasury in 2022. The settlement concerned sanctions violations that occurred between 2014 and 2017 in the Crimean Peninsula, Cuba, Iran, Sudan, and Syria.