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Writer's pictureJamal Saafir

Bittrex Settles SEC Lawsuit To The Tune of $24 Million


As reported by Decrypt, the cryptocurrency exchange Bittrex has agreed to pay $24 million to rectify a lawsuit with the United States Securities and Exchange Commission (SEC), the regulator announced Thursday, August 8th.


The SEC stated that the American exchange conceded to recompense, on a joint and several basis, disgorgement of $14.4 million, prejudgment interest of $4 million, and a civil penalty of $5.6 million totaling $24 million.


Bittrex former CEO William Shihara

The SEC struck Seattle-based Bittrex and its former CEO William Shihara with a lawsuit back in April of 2023, alleging that the Seattle-based exchange had failed to register as a broker-dealer, exchange, and clearing agency. The agency alleged that Bittrex raked in at least $1.3 billion in unlawful earnings between 2017 and 2022.




Bittrex allegedly operated as an unregistered broker, national securities exchange and securities intermediary, according to a filing, which claimed the platform earned at least $1.3 billion in revenues from investor transaction fees.


According to an SEC press release on April 17, 2023, the complaint alleged that Bittrex and Shihara, who was the company’s CEO from 2014 to 2019, coordinated with issuers who sought to have their crypto asset 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 the crypto asset as the offering of a security. For example, in an effort to avoid regulatory scrutiny, before Bittrex would make an asset available on its platform, Bittrex and Shihara instructed issuer-applicants to delete statements related to “price prediction[s],” “expectation of profit,” and other “investment related terms.”


The SEC also alleged that “Bittrex repeatedly chose profits over investor protection," said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. "As laid out in our complaint, Bittrex’s business model was based on three things: circumventing the registration requirements of the federal securities laws; counseling issuers of crypto asset securities to do the same by altering their offering materials; and combining multiple market intermediary functions under one roof to maximize profits.


"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 SEC’s Division of Enforcement, in a statement.


As part of the settlement, Bittrex neither admitted nor denied the SEC's allegations.


Bittrex is a smaller crypto exchange in the United States, but it has been under the scrutiny of regulators and American authorities since 2022.


In 2022, the exchange agreed to pay $29 million to settle enforcement cases with United States authorities for "apparent violations" of sanctions against countries including Iran, Cuba, and Syria.


In May, Bittrex filed for bankruptcy shortly after tapering off its U.S. operations. The exchange said it was not "economically viable" to continue running the exchange in the "current U.S. regulatory and economic environment."








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