The SEC has reportedly reached an agreement on the case against Bittrex and its former CEO for operating an unregistered exchange. As per the notice issued by the SEC, the regulator has ordered Bittrex and Bittrex Global to pay a sum of more than $14.4 million in disgorgement, an additional $4 million in prejudgement interest, as well as $5.6 million in civil penalties in an effort to settle the dispute within the local regulator. However, the agreement is still subject to approval from the court.
The enforcement director of the SEC, Gurbir Grewal, claimed that Bittrex worked with token issuers for several years to get rid of any indications on their online statements that proved that they were investment contracts. At the same time, it was mentioned that the settlement against Bittrex displays how attempts of escaping liability and changing descriptions are merely futile.
The filing stated,
”Defendants agree that, as to Bittrex, the terms of the settlement reflected in this Consent and in the Judgment are subject to approval by the Bankruptcy Court in the Bankruptcy Case and shall be treated as an allowed, unsecured claim under the terms of any Plan filed by Bittrex in the Bankruptcy Case.”
Will Bittrex Bounce Back?
The SEC filed its complaint against Bittrex and Shihara and claimed that they operated as an unregistered national securities exchange, broker, and clearing agency. The regulator also filed an additional suit against Bittrex Global over its operation of a single shared order book along with Bittrex.
Furthermore, the US Department of the Treasury’s Office of Foreign Assets Control and Financial Crimes Enforcement took enforcement actions against Bittrex back in October 2022, which led to a settlement of over $29 million.
Following that, the exchange announced its plans of winding up its operations in the US while highlighting the uncertain regulatory environment. However, Bittrex ended up filing for bankruptcy in May this year. Now the exchange has 90 days to pay the settlement fee. This settlement might be a positive sign for Bittrex in mapping out its comeback in the market.
SEC Pumps Up Regulatory Pressure
As of now, the SEC has filed a series of cases against several crypto exchanges that still remain pending. Some of the firms SEC cracked down against just recently include Binance, Coinbase, Ripple Labs, and Terraform Labs. However, several analysts and US lawmakers have continuously accused and criticized the regulatory authority for adopting a regulation-by-enforcement approach to both cryptocurrencies and crypto firms.
A number of crypto firms have recently refiled for spot Bitcoin ETF applications with the SEC after understanding that the regulator gave all of them a cold shoulder previously. As per the current situation, several analysts believe that the regulator would have no choice but to approve some of them or all of them to avoid being a victim of widespread criticism.