Bittrex faces potential SEC action amid US operations closure due to challenges with regulatory compliance and unclear crypto regulations.
If you go read r/Bittrex right now you can literally feel the pathos pouring out of the screen and into your soul.
The US Securities and Exchange Commission (SEC) is reportedly contemplating legal action against the cryptocurrency exchange Bittrex, despite the company’s ongoing efforts to shut down its US operations. A report by The Wall Street Journal on April 16 suggested that the SEC’s enforcement division is leaning towards recommending a lawsuit against the Seattle-based crypto firm for alleged investor protection violations.
In March, Bittrex received a notice from the SEC regarding potential enforcement action, according to the company’s general counsel, David Maria. At that point, Bittrex had already begun the process of winding down its US operations. Moreover, the SEC’s Wells notice indicated that Bittrex operated as an exchange, broker-dealer, and clearinghouse without proper registration, violating existing laws.
Bittrex Struggles with SEC Compliance
Maria disclosed that Bittrex held discussions with the SEC in late 2022 about registering its operations. However, the company discovered that adhering to the SEC’s rules would require them to effectively halt all income-generating activities within the United States. Additionally, the general counsel emphasized that Bittrex’s compliance challenges stemmed from the SEC’s failure to provide clear cryptocurrency regulations in the first place.
#Bittrex can you explain how the amount of tokens in circulation is 100 + million tokens more than the entire legal float of a company with your 1 for 1 backed token? $AMC #AMC retail HODLs most of the shares? https://t.co/3fn09uYhZS pic.twitter.com/Zngr6rlODb
— just another Rat Toy (@rattoy2) April 9, 2023
As Bittrex proceeds with its US operations closure, the company is uncertain whether the SEC will file a lawsuit. Maria noted that if the SEC decides to take action, Bittrex is prepared to litigate, unless regulators propose a reasonable settlement offer.
Bittrex Ends US Operations Amid Regulatory Challenges
On March 31, Bittrex announced its intention to cease all operations in the United States, citing a difficult regulatory and economic environment. The exchange advised its US customers to withdraw their funds by April 30, 2023. This decision came after Bittrex faced numerous issues domestically. In 2022, the company agreed to pay over $29 million in fines to the US Department of the Treasury’s Office of Foreign Assets Control and Financial Crimes Enforcement Network for sanctions violations in Crimea, Cuba, Iran, Sudan, and Syria between 2014 and 2017.