The U.S. Securities and Exchange Commission (SEC) alleged Bittrex unlawfully operated an unlicensed securities exchange in the country. 

In a lawsuit filed on Monday, the SEC charged crypto exchange Bittrex for failing to register as a national securities exchange. The regulator found that the platform earned at least $1.3 billion in revenues from investors between 2017 and 2022, without officially registering with the commission. 

“Bittrex has held itself out as a platform that facilitated buying and selling of crypto assets that the SEC’s complaint alleges were offered and sold as securities,” said the SEC. 

The complaint also alleges that Bittrex CEO William Shihara coordinated with token issuers who sought a listing on the exchange to delete “problematic statements” from public channels that would be flagged by regulators as the alleged offering of a security. 

“Today’s action, yet again, makes plain that the crypto markets suffer from a lack of regulatory compliance, not a lack of regulatory clarity,” said SEC Chair Gary Gensler in a statement.

Gabriel Shapiro, general counsel at Delphi Labs, said the action against Bittrex was more aggressive than he could have imagined, specifically with respect to the SEC’s definition of crypto assets as securities. 

The lawsuit alleges that many tokens on Bittrex have characteristics akin to securities, naming Dash (DASH), Algorand (ALGO), OMG Network (OMG), Monolith (MONO), Naga (NGC) and Real Estate Protocol (IHT).

The SEC took aim at Dash’s masternode model even though the entity behind it is funded by validators through block rewards. Dash is a privacy-focused network, created from a fork of the Bitcoin blockchain. It uses the CoinJoin method of running a sequence of transactions to obscure transaction history.

Algorand, a token with $1.6 billion in market cap, was also classified as a security by the regulator. The crypto community was quick to point out that Gensler himself was an early advocate of Algorand. Videos of the SEC Chair praising the blockchain’s technology began to resurface on Twitter, where Gensler can be seen saying “you can create Uber on top of it [Algorand].”