Bittrex faces investigation – Seattle-based company cryptocurrency exchange, Bittrex has come under scrutiny by the Security and Exchange Commission. The exchange is facing legal action from the SEC for allegedly violating the investors’ protection law.
According to Bittrex’s chief legal officer, David Maria, the SEC enforcement team alerted Bittrex back in March. This comes following Bittrex’s plan to cease local operations this month. The decision to stop operating in the U.S. is a result of regulatory uncertainties surrounding the crypto industry in the country.
However, Bittrex is not sure if the regulatory agency will bring a lawsuit. If the SEC decides to take legal action against the crypto giants, they will be heading to court unless regulators “came with a reasonable settlement offer.”
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In the “Wells notice,” the SEC accused Bittrex of violating laws that have to do with protecting investors. In 2022, Bittrex communicated with the SEC regarding how to register its operation in the country. They found that there was no way they would follow the SEC’s rules without shutting down all its revenue-producing activities in the country.
Bittrex’s US Operation Shutdown
In March 2023, the crypto exchange company announced its plans of shutting down domestic operations in the United States. Furthermore, users were advised to withdraw their funds from the platform before April 30, 2023.
David Maria stated that,
“the lack of regulatory clarity here results in substantial costs and no certainty as to what can and can’t be offered.”
According to Gary Gensler, the SEC chairman, quite a number of companies in the cryptocurrency industry have ignored the regulation his organization maintains. He has reiterated that companies like Bittrex should have their operations registered with the SEC.
This would help reduce conflict of interest, make the platforms more accessible, and have a more traditional stock exchange look. Last year, Bittrex agreed to pay about $29 million to resolve its legal issues with the American authorities. The fine was for apparently violating sanctions in countries like Iran, Cuba, and Syria.
Also, in October 2022, Bittrex received legal action from the Office of Foreign Assets Control(OFAC) and the Financial Crimes Enforcement Network (FinCEN). The action was for allegedly violating requirements under the Bank Secrecy Act.