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Bittrex vs SEC: the crypto-exchange accepts plea deal and pays $24 million fine

Crypto exchange Bittrex has accepted a plea deal to charges by the US Securities and Exchange Commission (SEC), paying a fine in the total amount of $24 million. 

Bittrex: The crypto-exchange and the plea deal over SEC charges

Bittrex, former CEO William Shihara and Bittrex Inc.’s foreign affiliate, Bittrex Global GmbH, have agreed to a plea bargain regarding charges by the US SEC

In essence, the SEC’s complaint in the US District Court on 17 April accused the crypto-exchange of acting as an unregistered broker, exchange and clearing agency

Thus, the regulator sued Bittrex for providing crypto services to US investors, which were offered and sold as unregistered securities.

Not only that, the platform’s CEO from 2014 to 2019, William Shihara, was also implicated in the charges. 

The SEC sued him for instructing issuers of new tokens to be distributed on Bittrex to first delete certain “problematic statements” from public channels. Shihara believed they would lead a regulator, such as the SEC, to investigate whether the crypto was offered and sold as a security.

In any case, yesterday, the agreement between the crypto-exchange, Shihara and its foreign affiliate, with the SEC was made official, thus signing the settlement. 

Bittrex vs SEC: the crypto-exchange must pay a $24 million fine

By signing the plea agreement, the defendants also agreed to pay the related fine for violating Sections 5, 15(a) and 17A of the Securities and Exchange Act of 1934. 

This consists of damages of $14.4 million plus interest of $4 million and a civil penalty of $5.6 million, for a total of $24 million.

Gurbir S. Grewal, director of the SEC’s Division of Enforcement, commented as follows:

“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.”

The case of Bittrex US 

Bittrex’s US subsidiary, Bittrex US, had filed for Chapter 11 bankruptcy last May

After a suspension of withdrawals, the US platform was able to begin returning cryptos to its customers as of mid-June, reactivating withdrawals from the platform. It was the Delaware bankruptcy court that gave the okay. 

This failure of Bittrex US, is a consequence of charges brought by the US SEC, which had sued it in March

In any case, the closure of the US platform had not involved Bittrex Inc. and its foreign subsidiary, which today entered into a plea bargain to settle the April complaint of the US SEC.

Stefania Stimolo
Stefania Stimolo
Graduated in Marketing and Communication, Stefania is an explorer of innovative opportunities. She started out as a Sales Assistant for e-commerce, and in 2016 she began to develop a passion for the digital world, initially in the Network Marketing sector, where she discovered and became passionate about the ideals behind Bitcoin and Blockchain technology, which lead her to work as a copywriter and translator for ICO projects and blogs, and organize introductory courses.