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Bittrex’s $24 Million Settlement: Unpacking the SEC’s Latest Move in the Crypto Arena

Regulatory News | Aug 11, 2023

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Bittrex's $24 million settlement with the SEC highlights the tightening regulatory scrutiny on crypto exchanges offering unregistered securities to U.S. investors.

In a pivotal moment for the cryptocurrency industry, Bittrex, one of the leading crypto exchanges, has reached a significant settlement with the Securities and Exchange Commission (SEC). The $24 million agreement, stemming from allegations of offering unregistered securities to U.S. investors, not only underscores the regulatory challenges crypto platforms face but also sets a precedent for the industry's future.

  1. Settlement Amount: Bittrex, a prominent crypto exchange, has agreed to a settlement with the Securities and Exchange Commission (SEC). The exchange will pay a fine of $24 million. This settlement comes after the SEC accused Bittrex of offering U.S. investors access to unregistered securities.
  2. Details of the Fine: The total fine of $24 million is broken down as follows:
    • $14.4 million in disgorgement
    • $4 million as prejudgment interest on the disgorgement
    • $5.6 million in civil money penalties.

    Bittrex's U.S. arm, which filed for bankruptcy in May, has a deadline of 90 days post the effectiveness of its liquidation plan to pay the SEC. If the exchange fails to pay its fees and penalties by March 1 of the following year, the SEC may seek a court judgment.

  3. Allegations and Charges: The SEC's primary contention was that Bittrex operated as a securities exchange, broker, and clearinghouse without registering for any of these roles with the regulatory body. The SEC also alleged that Bittrex instructed crypto issuers to remove public statements that might indicate their tokens could be in violation of securities laws.
  4. Other Exchanges: Bittrex wasn't the only crypto exchange under the SEC's radar. Other major exchanges like Coinbase and Binance.US faced similar charges.
  5. Statements from SEC: The SEC Enforcement Director, Gurbir Grewal, emphasized that merely changing labels or descriptions won't absolve entities from liabilities. The economic realities of the offerings are what truly matter. The SEC is keen on ensuring compliance in the crypto industry and aims to provide relief to affected investors.

With major exchanges under scrutiny, the SEC's stance on crypto compliance becomes increasingly significant.


NCFA Jan 2018 resize - Bittrex's $24 Million Settlement: Unpacking the SEC's Latest Move in the Crypto ArenaThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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