Crypto trading platform Bittrex – along with its former chief executive, William Shihara – has been ordered to settle SEC charges for failing to register as an exchange, broker and clearing agency.
Bittrex and Bittrex Global agreed to pay a total payment of £24 million – specifically, a disgorgement of $14 million on a joint and several basis, a prejudgment interest of $4 million, and a civil penalty of $5.6 million.
Earlier this year in April, the SEC found that Bittrex was operating an unregistered national securities exchange and providing services to US investors related to crypto assets which were offered and sold as securities.
The business was also found to have “directed issuers who sought to have their crypto assets made available for trading on Bittrex’s platform to first delete from public channels certain “problematic statements” that Shihara believed would lead a regulator, such as the SEC, to investigate whether the crypto asset was offered and sold as a security.”
In the settlement, which is subject to court approval, neither Bittrex nor Shihara have admitted or denied any wrongdoing in response to the SEC’s allegations.
This news follows the SEC’s ruling earlier this week which ordered 11 Wall Street firms $289 million for widespread recordkeeping failures, having been found to have been using longstanding “off-channel” communications following an investigation .
Gurbir Grewal, director of the enforcement division at SEC, said: “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.
“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.”