Bittrex Charged for Operating an Unregistered Exchange, Broker, and Clearing Agency

On Monday, the U.S. Securities and Exchange Commission (SEC) charged another cryptocurrency exchange, accusing the trading platform Bittrex of operating “an unregistered national securities exchange, broker, and clearing agency.” Since 2014, Bittrex allegedly sold crypto assets that were “offered and sold as securities.” The SECs complaint was filed in the U.S. District Court for the Western District of Washington.

In a separate filing, the commission charged Bittrex Inc.s foreign affiliate, Bittrex Global GmbH, for not registering as a national securities exchange in connection with its operation of a single shared order book along with Bittrex.

According to the SEC, the crypto exchange has been facilitating the purchase and sale of crypto assets since around 2014. However, the commissions complaint alleges that those assets were offered and sold as securities.

The commission alleged that Bittrex facilitated buying and selling of crypto assets that were offered and sold as securities; serviced investors as a broker, exchange and clearing agency without registering with the SEC; and worked to conceal its offering of securities from regulators, according to the release.

It also alleged that Bittrex Global should have registered as well because it operated a shared order book along with Bittrex, the release said.

“From 2017 through 2022, Bittrex earned at least $1.3 billion in revenues from, among other things, transaction fees from investors, including U.S. investors, while servicing them as a broker, exchange, and clearing agency without registering any of these activities with the Commission,” said the SEC.

Bittrex and Shihara allegedly deleted some “problematic statements” believed to have the potential of attracting SECs investigation of the crypto asset as the offering of a security.

According to SEC Chair Gary Gensler, “Bittrex, as alleged, failed to register and comply with U.S. securities laws as an exchange, broker-dealer, and clearing agency. Cosmetic alterations did nothing to change the underlying economic realities of the offerings and Bittrex‘s conduct. Currently, we’re holding Bittrex accountable for its non-compliance.”