The U.S. Securities and Exchange Commission (SEC) announced a settlement with crypto exchange Bittrex and its co-founder and former CEO William Shihara.
In an Aug. 10 release, the agency said that Bittrex and its global entity had agreed to pay a total of $24 million in penalties as part of the settlement, which is still subject to court approval.
The fines include disgorgement of $14.4 million, prejudgment interest of $4 million, and a civil penalty of $5.6 million. Under the terms of the agreement, Bittrex can neither confirm nor deny the SEC’s allegations, or make any public statements that suggest the SEC does not have a factual basis for the charges alleged.
“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. They failed,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, in a statement.
Congrats on another meaningless enforcement protecting absolutely no one!
— ZachXBT (@zachxbt) August 10, 2023
“They [The SEC] take taxpayer investment under the promise of collecting more in fines, making a profit for the taxpayer. They are literally an unregistered security,” wrote one user on Twitter.
In April, Bittrex shut down its U.S.-based exchange, saying it was not “economically viable” to continue operating in the current regulatory environment. The announcement came just a few weeks before the SEC’s enforcement action, which alleged several cryptocurrencies were actually securities, including Algorand and Dash.
“Back in 2013, when the three of us built Bittrex, it was about technology… Nine years later, the crypto ecosystem is very different. Regulatory requirements are often unclear and enforced without appropriate discussion or input, resulting in an uneven competitive landscape,” said Bittrex co-founder and CEO Richie Lai at the time.