The U.S. Securities and Exchange Commission (SEC) has sued cryptocurrency trading platform Bittrex for breaking securities laws, even though the exchange is actively winding down its operations in the country.
The SEC’s complaint alleges that Bittrex and its former CEO, Bill Shihara, deliberately avoided the federal securities laws’ registration requirements by telling crypto asset issuers to remove some statements from their offering materials that would suggest that they were securities.
The regulator also says Bittrex earned at least $1.3 billion in revenues from transaction fees from investors without registering or complying with U.S. securities laws. The lawsuit comes after Bittrex announced that it planned to shutdown its operations in the United States by the end of April.
The SEC filed the lawsuit as part of its ongoing efforts to safeguard investors and ensure compliance in the crypto markets. SEC Chair Gary Gensler stated that “crypto markets suffer from a lack of regulatory compliance, not a lack of regulatory clarity” and “cosmetic alterations did nothing to change the underlying economic realities of the offerings and Bittrex’s conduct.”
Earlier, Nasdaq-listed cryptocurrency exchange Coinbase revealed it has received a Wells notice, which indicates it could soon face enforcement action from the SEC. The regulator has been criticized for not providing clarity on the rules it’s enforcing.
This criticism reached a peak over the weekend when U.S. Congressman Warren Davidson (R-OH) announced his plan to introduce legislation for the purpose of removing the SEC chair from his position.
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