Crypto company Bittrex has reached a $24 million settlement with the SEC over charges that it operated as an unregistered national securities exchange, broker, and clearing agency.
The former CEO, William Shihara, along with Bittrex’s foreign affiliate, Bittrex Global, also settled the charges. The SEC initially filed its complaint in April, stating that Bittrex provided services to U.S. investors in connection with crypto assets deemed to be securities.
Additionally, the SEC accused Bittrex and Shihara of advising issuers to remove certain “problematic statements” from public channels prior to listing their crypto assets, with the intent to avoid regulatory scrutiny regarding whether those assets qualified as securities.
“Bittrex collaborated with token issuers to ‘scrub’ their online statements of any indication that they were investment contracts—all in a bid to evade federal securities laws. They ultimately failed,” said Gurbir Grewal, director of the SEC’s division of enforcement.
Before the SEC action, Bittrex already announced plans to cease operations in the U.S. by the end of April, citing the “current U.S. regulatory and economic environment.” In May, the company filed for Chapter 11 bankruptcy in federal court in Delaware, reporting estimates of over 100,000 creditors and liabilities and assets ranging from $500 million to $1 billion.
Bittrex has neither admitted nor denied the SEC’s allegations but has agreed to disgorge $14.4 million, pay $4 million in prejudgment interest, and a civil penalty of $5.6 million.