SEC accuses Bittrex of unregistered operations and identifies six tokens as securities
As Bittrex prepares to cease offering services in the United States, the U.S. Securities and Exchange Commission has lodged a complaint against the Seattle-based exchange.
The SEC has filed charges against Bittrex and its former CEO and co-founder William Shihara for running an unlicensed national securities exchange, broker, and clearing agency. Separate charges were lodged against Bittrex Global.
The SEC has filed four Exchange Act violation allegations in the U.S. District Court for the Western District of Washington against the companies and Shihara. Additionally, Bittrex Global is being accused “in connection with its operation of a single shared order book alongside Bittrex.”
In its complaint, the SEC argued that the Bittrex-traded OMG, Dash, Monolith (TKN), Naga (NGC), and IHT Real Estate Protocol (IHT) tokens are securities. In the past, the SEC has been criticized for its practice of “regulation by enforcement” by claiming tokens are securities only when it files such complaints, and not beforehand.
The agency also asserts that Bittrex and Shihara advised clients to remove “problematic statements” in order to avoid regulatory scrutiny. In a jury trial, the SEC complaint demands disgorgement, fines, and permanent injunctions against the defendants.
The SEC action was anticipated by Bittrex, which reportedly received a March warning from Wells about the impending action. The exchange had previously announced its intention to cease operations in the United States on April 30 due to the regulatory climate.