The SEC fines Bittrex $24 million

The Securities and Exchange Commission (SEC) made an announcement today regarding the resolution reached with crypto asset trading platform Bittrex Inc. and its co-founder and former CEO, William Shihara. The agreement settles charges related to the operation of an unregistered national securities exchange, broker, and clearing agency.

Bittrex Inc.'s foreign affiliate, Bittrex Global GmbH, has also reached a settlement in connection with charges concerning its failure to register as a national securities exchange.

According to the SEC's complaint, filed on April 17, 2023, in the U.S. District Court for the Western District of Washington, Bittrex provided services to U.S. investors in connection with crypto assets that the complaint alleges were offered and sold as securities. This operation as an unregistered broker, exchange, and clearing agency forms the basis of the charges.

The complaint further claims that Bittrex and its former CEO, William Shihara, who led the company from 2014 to 2019, instructed issuers seeking to list their crypto assets on Bittrex's platform to remove specific “problematic statements” from public channels. These actions were taken to prevent regulators, such as the SEC, from initiating investigations into whether the crypto assets were offered and sold as securities.

Under the terms of the settlement, the defendants neither admit nor deny the allegations put forth by the SEC.

The settlement, contingent on court approval, mandates that Bittrex and William Shihara are permanently restrained from violating Sections 5, 15(a), and 17A of the Securities Exchange Act of 1934. Additionally, Bittrex Global is restrained from violating Section 5 of the same Act. As part of the resolution, Bittrex and Bittrex Global have agreed to make joint and several payments, which include disgorgement of $14.4 million, prejudgment interest amounting to $4 million, and a civil penalty of $5.6 million. This cumulative payment totals $24 million.