SEC has Settled its Case Against Bittrex and its Ex-CEO for $24M
- Crypto exchange Bittrex and the SEC have reached a settlement that is pending court’s approval.
- The lawsuit claimed that Bittrex and its former CEO operated an unregistered securities exchange.
- Bittrex has agreed to pay a disgorgement of $14.4 million along with other penalties totaling $24 million.
- Bittrex filed for Chapter 11 bankruptcy with the US Bankruptcy Court for Delaware in April after the lawsuit.
The United States Securities and Exchange Commission (SEC) has announced its settlement in a case against crypto trading platform Bittrex and its former CEO, William Shihara, for a total value of $24 million. As per the lawsuit, the regulator claimed that the crypto firm was operating an unregistered securities exchange in the region. This is the’regulation by enforcement’ strategy of the regulator, condemned by many.
As per an August 10 notice, the agreement between the SEC and Bittrex is yet to be approved by the court. However, the settlement permanently enjoins Bittrex and Shihara from violating several sections of the Securities Exchange Act of 1934.
Additionally, “Bittrex and Bittrex Global agreed to pay, on a joint and several basis, disgorgement of $14.4 million, prejudgment interest of $4 million, and a civil penalty of $5.6 million, for a total monetary payment of $24 million,” confirmed the regulator.
“For years, Bittrex worked with token issuers to’scrub’ their online statements of any indicia that they were investment contracts—all in an effort to evade the federal securities laws. They failed,” said Gurbir S. Grewal, Director of the agency’s Division of Enforcement, while adding:
“Today’s settlement makes clear that you cannot escape liability by simply changing labels or altering descriptions because what matters is the economic realities of those offerings. I am grateful to the SEC staff for aggressively pursuing non-compliance in the crypto industry, resolving this matter, and bringing additional relief to harmed investors.”
The lawsuit was filed in April in which the regulator claimed that Bittrex and Shihara, who was the company’s CEO from 2014 to 2019, were responsible for operating a crypto clearing house and an unregistered securities exchange. Moreover, the regulator claims that the exchange asked token issuers to remove certain “problematic statements” from their social media pages because it would lead regulatory authorities to investigate the firm’s actions.
As reported earlier by BitcoinWisdom, Bittrex filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the District of Delaware in April after the SEC lawsuit. The firm was reported to have more than 100,000 creditors, between $500 million and $1 billion in assets, and between $500 million and $1 billion in liabilities.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
