In a recent development, cryptocurrency exchange Bittrex succumbed to charges of providing U.S. investors with access to unregistered securities and agreed to pay a hefty $24 million fine, marked for payment within two months of filing a liquidation plan. This development follows the U.S. Securities and Exchange Commission’s litigation against Bittrex earlier this year, alleging the platform was in operation as a securities exchange, broker, and clearinghouse without having registered these activities with the regulatory body.
The SEC has demonstrated a spirited pursuit of similar allegations against other notable crypto exchanges such as Coinbase and Binance.US. In addition to these charges, the SEC accused Bittrex of directing crypto issuers to remove public statements that might indicate their tokens could potentially breach securities law.
Reflecting the gravity of the situation, Bittrex has refrained from either admitting or denying these allegations and has been ordered to avoid public statements that could insinuate the SEC didn’t base its allegations on concrete facts. The regulatory body will expect payment from Bittrex within 90 days after its liquidation plan takes effect. A court judgement may follow if Bittrex fails to pay its fines and penalties by March 1 of the upcoming year.
A crucial aspect of the settlement is subject to the Bankruptcy Court’s approval, as indicated in the submitted document. Assuming this gets approved, the settlement will be considered as an allowed unsecured claim under any plan Bittrex files in the bankruptcy case.
The ripple effect of these developments extends to shaping industry norms as SEC Enforcement Director Gurbir Grewal emphasized. The settlement symbolizes a regulatory warning that merely changing labels or descriptions will not suffice to evade legal consequences. The underlying economic realities of crypto offerings are what draw regulatory scrutiny. This tribute to the SEC staff undertaking an aggressive approach, pursuing non-compliance in the crypto arena, and resolving the matter to bring additional relief to aggrieved investors reflects the emerging stringent regulatory landscape in the crypto space. Judging from this incident, it’s clear that this blockchain narrative underscores a twofold reality of immense opportunities supplemented with considerable regulatory risks.
Source: Coindesk
