Bittrex has landed itself in the spotlight for potential regulatory action from the SEC amid the firm proceeding to shut down all operations. Currently, the enforcement division of the SEC is committed to cracking down against Bittrex regarding the violation of the investor protection laws. The enforcement unit had already informed the firm of a potential probe by the SEC back in March. However, at that time, Bittrex was winding up its operations.
The current situation is worrying for the entire crypto community, as it has been under the pressure of increased regulatory actions for a while now. The SEC’s enforcement actions against Bittrex highlight the ways using which regulators are targeting crypto firms, some of them which include Coinbase, Kraken, etc. Similarly, the Wells notice, the SEC wrote that Bittrex violated a series of laws by conducting business as a crypto exchange, broker-dealer, and clearinghouse without getting itself registered.
The general counsel of Bittrex stated that the firm discussed potential ways of getting its operations registered by the SEC in late 2022. However, it was discovered that the firm had no real opportunity to follow the rules of the SEC as it would have meant shutting down the entirety of its value-generating activities throughout the country. Currently, Bittrex is unsure if the SEC would file against the firm or not as the firm itself is in the middle of winding up.
What Does the SEC Action Mean for Bittrex?
Similarly, it is a fact that the SEC’s action towards Bittrex serves as a wakeup call for the crypto industry. The lack of regulatory clarity in this specific sector has resulted in increased uncertainty regarding what should, and should not be offered. If the SEC continues making similar moves, it might just end up burying some major cryptocurrency companies.
Furthermore, Bittrex’s General Counsel David Maria criticized SEC’s unclear regulatory requirements. Maria added,
“The lack of regulatory clarity here results in substantial costs and no certainty as to what can and can’t be offered.”
Currently, Bittrex has asked its customers to withdraw all of their funds by April 30. Prior to its departure from the US soil, the firm was subject to great issues. Furthermore, back in 2022, the firm had agreed to pay approximately $29 million in fines to the US Department of the Treasury’s Office of Foreign Assets Control and the Financial Crimes Enforcement Network. The settlement, itself, had links with the violation of sanctions in Cuba, Iran, Sudan between 2014 and 2017.