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November 20, 2023 Coin Telegraph

Bittrex

The announcement came roughly nine months after U.S.-based crypto exchange Bittrex said it would shutter operations in response to the country’s regulatory environment.

Liechtenstein-headquartered cryptocurrency exchange Bittrex Global has announced it plans to wind down operations starting with the suspension of trading activity on Dec. 4.

In a Nov. 20 update published to its website, Bittrex Global said all users with U.S. dollar holdings needed to convert their funds to Euros or cryptocurrency before Dec. 4 or risk being unable to withdraw the assets. On Dec. 4, the platform will suspend trading activities and only allow certain withdrawals.

“This decision was not made lightly, and we understand the inconvenience it may have on our valued customers,” said Bittrex Global.

The platform added:

“Do not make any deposits to our platform. We cannot guarantee that they will be received safely. If you do send a deposit, your funds may be permanently lost as a result of the attempted transfer.”

It is with great regret that we inform you that Bittrex Global has decided to wind down its operations.

Effective Monday 4 December 2023, all trading activity on Bittrex Global will be disabled. After that date, customers will only be able to withdraw assets as part of the…
— Bittrex Global (@BittrexGlobal) November 20, 2023

The announcement came roughly nine months after its U.S.-based arm, Bittrex, said it planned to wind down operations in the country starting on April 30 “due to continued regulatory uncertainty.” In April, the U.S. Securities and Exchange Commission (SEC) charged Bittrex for operating as an unregistered exchange, broker and clearing agency.

Bittrex filed for Chapter 11 protection in U.S. bankruptcy court in May and settled its case with the SEC for $24 million in penalties and interest in August. The platform reopened withdrawals for users following approval in Delaware bankruptcy court.

The SEC also charged Bittrex Global in April “in connection with its operation of a single shared order book along with Bittrex.” It’s unclear whether the regulator’s actions contributed to the crypto exchange, headquartered in Liechtenstein, announcing the winding down of operations.

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SEC announces $24M settlement for case against Bittrex and its former CEO

August 10, 2023 Coin Telegraph

Bittrex

The U.S. regulator filed a complaint in April claiming Bittrex and William Shihara operated an unregistered exchange, also separately charging Bittrex Global.

The United States Securities and Exchange Commission (SEC) has announced an agreement with crypto trading platform Bittrex and co-founder and former CEO William Shihara for operating an unregistered exchange.

In an Aug. 10 notice, the SEC said Bittrex and Bittrex Global agreed to pay $14.4 million in disgorgement, $4 million in prejudgment interest, and $5.6 million in civil penalties to settle the legal dispute with the federal regulator. The agreement is still subject to court approval.

“For years, Bittrex worked with token issuers to 'scrub' their online statements of any indicia that they were investment contracts — all in an effort to evade the federal securities laws,” said SEC enforcement director Gurbir Grewal. “Today’s settlement makes clear that you cannot escape liability by simply changing labels or altering descriptions because what matters is the economic realities of those offerings.”

Today we announced that crypto asset trading platform Bittrex Inc. and its co-founder and former CEO, William Shihara, agreed to settle charges that they operated an unregistered national securities exchange, broker, and clearing agency.
— U.S. Securities and Exchange Commission (@SECGov) August 10, 2023

In a statement provided to Cointelegraph, Shihara called the settlement a “good outcome”, adding the United States needed to “[strike] a balance between fostering innovation, encouraging entrepreneurs and the need to protect consumers”. Shihara was the CEO of Bittrex from its founding in 2014 to his departure in 2019.

The SEC’s complaint filed in April claimed Bittrex and Shihara operated an unregistered national securities exchange, broker, and clearing agency. The financial regulator also filed a separate enforcement action against Bittrex Global for “its operation of a single shared order book along with Bittrex”.

The U.S. Department of the Treasury’s Office of Foreign Assets Control and Financial Crimes Enforcement Network took enforcement actions against Bittrex in October 2022, resulting in the firm agreeing to a $29-million settlement. The exchange announced in March it was planning to shut down operations in the United States in April — claiming the move was due to the country’s regulatory environment — and filed for Chapter 11 bankruptcy in May.

As of Aug. 10, the SEC has legal cases pending against crypto firms including Binance, Coinbase, Ripple Labs and Terraform Labs. Many U.S. lawmakers and industry leaders have criticized the agency for taking a “regulation by enforcement” approach to crypto.

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SEC is ‘wrongfully attempting’ to police crypto markets: Paradigm counsel

July 11, 2023 Coin Telegraph

Bittrex

Rodrigo Seira has blasted the SEC for overstepping its jurisdiction in its case against crypto exchange Bittrex.

Crypto investment firm Paradigm’s Special Counsel Rodrigo Seira has become the latest to slam the United States securities regulator, this time for “wrongfully” pursuing crypto exchange Bittrex in an attempt to police secondary crypto markets.

In a July 11 Twitter thread, Seira added his thoughts after an amicus brief filing from Paradigm, arguing that the U.S. Securities and Exchange Commission's case against U.S.-based crypto exchange Bittrex should be “dismissed” as it relies upon an unreasonable use of the Howey test to make its claims.

The SEC’s lawsuit against Bittrex is the first of three cases that the SEC has brought in rapid succession against crypto exchanges. Through these actions, the SEC is wrongfully attempting to lay claim over crypto secondary markets.
— Rodrigo (@RSSH273) July 10, 2023

On July 7, Paradigm filed an amicus brief, which claimed the financial regulator overstepped its jurisdiction.

In his thread, Seira also pointed out that SEC chair Gary Gensler had previously admitted that crypto exchanges did not have an adequate regulatory framework, making it clear in his view that the regulator lacks sufficient authority to regulate these secondary markets.

Seira made similar arguments in a July 7 blog post, noting the SEC lacks authority because crypto-assets do not involve “investment contracts.” As a result, crypto-assets do not fall under the agency’s remit.

“Until the SEC engages in the rulemaking Coinbase has requested, the digital-assets industry is stuck in limbo, simultaneously told to ‘come in and register’ yet having no effective means of doing so.”

The SEC first filed a complaint against Bittrex on April 17. Nearly two weeks later on April 30, the exchange surrendered its Florida money transmitter license before eventually filing for bankruptcy on May 8.

This also marks the second time that Paradigm has offered its support to a crypto organization facing legal action from the SEC.

On May 11, Paradigm petitioned to file an amicus brief in support of Coinbase which claimed that the SEC had failed to provide clear rules or guidance for digital asset firms in the U.S.

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Bittrex may still face enforcement action in Florida amid bankruptcy

July 6, 2023 Coin Telegraph

Bittrex

A filing in bankruptcy court from Florida's Office of Financial Regulation suggested the regulator still had the “administrative discretion” to charge Bittrex.

The Florida Office of Financial Regulation is considering action against United States-based cryptocurrency exchange Bittrex, which filed for Chapter 11 bankruptcy protection in May.

In a July 5 filing with the U.S. Bankruptcy Court for the District of Delaware, Florida Office of Financial Regulation (OFR) assistant general counsel Brandon Greenberg said the state regulator had been given information on Bittrex’s alleged failure to comply with Florida law. According to Greenberg, the OFR still had the “administrative discretion” to charge or not charge Bittrex.

The U.S. Securities and Exchange Commission filed a complaint against Bittrex on April 17, the exchange surrendered its Florida money transmitter license on April 30, and Bittrex filed for bankruptcy on May 8. At the time, the OFR said Bittrex surrendering its license “would not affect our prosecution of the Complaint”, which included allegations that the firm had failed to segregate customer assets with its operating capital, failed to maintain a surety bond, and another complaint which was redacted from the court filing.

The SEC enforcement action, bankruptcy case, and potential lawsuit in Florida came following Bittrex announcing it would wind down operations in the U.S. by April, citing "continued regulatory uncertainty" in the country. The exchange announced on June 15 that certain users could access their accounts and withdraw funds until Aug. 31.

Though the SEC filed separate charges against Bittrex Global in April, the global exchange has largely been unaffected by the regulatory and financial troubles the U.S. exchange faces. The global firm is regulated in Liechtenstein and Bermuda.

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Mark Cuban, John Reed Stark clash over the cause of FTX’s collapse

July 5, 2023 Coin Telegraph

Beaxy

Mark Cuban thinks the SEC could have saved U.S. customers from FTX had it adopted Japan’s approach to crypto regulation, but John Reed Stark disagrees.

Billionaire entrepreneur Mark Cuban has again locked horns with former securities chief John Reed Stark, this time over who was ultimately to blame for FTX’s collapse and the impact on creditors.

During a heated back-and-forth exchange, Cuban argued had the United States Securities and Exchange Commission set “clear regulations,” no one would have lost money from its collapse.

Stark earlier suggested cryptocurrency and stablecoins — including central bank digital currencies — solve no problems and that the crypto industry operates without regulatory oversight, consumer protections and audits, among other things.

You should read up on how Japan deals with regulation. https://t.co/yHCVwZAqvG

When FTX crashed, NO ONE IN FTX JAPAN LOST MONEY.

If the USA/SEC had followed their example by setting clear regulations that required the separation of customer and business funds and clear… https://t.co/Msvn9o9PCU
— Mark Cuban (@mcuban) July 4, 2023

Cuban argued that Japanese regulators — an increasingly Web3 friendly jurisdiction — are an example of a regulator that has done it right.

“When FTX crashed, NO ONE IN FTX JAPAN LOST MONEY,” he said.

Stark — a cryptocurrency skeptic — shot back, saying it “seems a bit of a stretch” to blame the SEC for the collapses of FTX, BlockFi, Celsius, Terra and Voyager, or what he called “dumpster fires.”

While Stark conceded that the SEC isn’t always right, he claimed the regulator saved investors “millions, perhaps even billions” in crypto losses.

The ex-SEC official claimed while the cryptocurrency industry seeks regulatory clarity, whenever rules are promulgated or proposed, “the crypto industry cries foul” and often responds by filing a “flashy legal challenge to its enactment.”

Cuban hit back, explaining the “best way” to prevent cryptocurrency fraud is to implement “brightline investor protection regulations.” He added:

“Anyone who doesn't register is de-facto in violation, can't operate and will be shut down. That's how you protect crypto investors.”

Stark, however, claims that the SEC only charged the likes of Binance, Coinbase, Beaxy and Bittrex months after the regulator made it clear that those firms were not in compliance.

“[These firms] opted to ignore the SEC — and reap profits for as long as possible without registering,” Stark added.

That is worthy of study Mark, thanks.

The laws in Japan require crypto exchanges to register with authorities, to keep customer money separate from their own accounts, to hold at least 95% of customers’ digital assets in a cold wallet and to entrust clients’ holdings of…
— John Reed Stark (@JohnReedStark) July 4, 2023

It is the second time in three weeks that the pair have clashed over how cryptocurrency should be regulated.

On June 11, Cuban called out the SEC for purportedly failing to provide cryptocurrency firms with a clear registration process.

He claimed it’s “near impossible to know” what constitutes security because the SEC’s “Framework for ‘Investment Contract’ Analysis of Digital Assets” document fails to explain how cryptocurrency firms can come into compliance.

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Bittrex challenges SEC’s authority in crypto lawsuit, seeks dismissal

July 2, 2023 Coin Telegraph

Bittrex

Bittrex has adopted a similar approach to Coinbase, aligning its arguments closely with those made by the larger cryptocurrency exchange.

Bittrex, a cryptocurrency exchange, has made a notable move in its legal dispute with the United States Securities and Exchange Commission (SEC) by submitting a motion to dismiss the lawsuit filed against it.

In its recent court filing, Bittrex argues that the SEC does not possess the necessary authority to regulate cryptocurrencies as securities unless explicitly granted by Congress. This assertion challenges the SEC's interpretation of existing securities regulations and seeks to establish a more defined regulatory framework that accommodates the distinct characteristics of digital assets.

In its motion to dismiss, Bittrex has adopted a similar approach to Coinbase, aligning its arguments closely with those made by the larger cryptocurrency exchange. This alignment indicates a strategic move by Bittrex to capitalize on the robust legal framework established by Coinbase and construct a unified defense against the SEC's lawsuit.

*Screenshot image of Bittrex motion to dismiss. Source: Court Listener*

Like Coinbase, Bittrex's legal team identifies what they perceive as shortcomings in the SEC's allegations regarding the trading of investment contracts. While both defendants acknowledge that the initial sale of certain crypto assets could be classified as securities contracts, they contend that the same classification does not extend to assets traded on secondary markets.

As a result, they argue that once an asset is launched and actively traded on secondary markets, it should no longer be considered a security, but rather categorized as a commodity or another class of digital asset.

Moreover, Bittrex contends that the SEC did not adequately communicate that its actions were prohibited, emphasizing a defense strategy commonly employed by crypto defendants who challenge the SEC's allegations.

The SEC filed allegations against Bittrex and its co-founder, William Shihara, in April, for running an unregistered national securities exchange. As per the complaint, Bittrex enabled the trading of digital assets that met the securities criteria outlined in U.S. federal securities laws, without obtaining SEC registration as an exchange.

Additionally, Bittrex Global GmbH, the foreign affiliate of Bittrex, faced charges from the SEC for not registering as a national securities exchange.

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