Bittrex Agrees to Pay $24 Million Fine to SEC
Bittrex faces a $24 million fine for alleged unregistered securities exchange operation amid the SEC’s intensified crackdown on the crypto industry.
- The SEC fines Bittrex $24 million for allegedly operating as an unregistered securities exchange, amid a series of enforcement actions against crypto firms.
- SEC Chairman Gary Gensler suggests most cryptocurrencies should be treated as securities except Bitcoin, fueling regulatory debates.
- The SEC’s lawsuits, including those against Coinbase and Binance, have identified multiple cryptocurrencies as securities, affecting the industry.
- Critics claim the SEC’s stringent approach is stifling US crypto innovation and investment, with Congress’ lack of support further hindering progress.
The United States Securities and Exchange Commission (SEC) continues its enforcement action to bring the crypto industry into regulatory compliance. The latest target of the SEC is bankrupt crypto exchange Bittrex, which has agreed to pay a $24 million fine after being accused of operating as an unregistered securities exchange.
According to court documents, Bittrex neither admitted nor denied the allegations made against it by the SEC. The exchange filed for Chapter 11 bankruptcy in May with $500 million in assets and $1 billion in liabilities.
— Whale Coin Talk (@WhaleCoinTalk) August 10, 2023
Bittrex the Latest Victim of SEC’s Accelerating Enforcement Push
Bittrex is not the only exchange or crypto firm to face regulatory action by the SEC. Kraken, another US-based exchange, was forced to close its crypto staking services and pay a $30 million settlement earlier this year. Paxos, a stablecoin firm, also faced enforcement action and had to halt the issuance of the Binance USD stablecoin.
Coinbase and Binance are currently facing enforcement actions for operating as unregistered securities exchanges. The SEC has also accused Binance of other charges related to mismanagement and the co-mingling of customer funds.
The SEC’s aggressive stance on crypto regulation follows a series of high-profile crypto catastrophes in 2022, including the collapse of the Terra ecosystem and FTX.
Everything a Security Aside From Bitcoin, Thinks Gensler
SEC Chairman Gary Gensler has expressed his belief that nearly all cryptocurrencies, aside from Bitcoin, should be classified as securities.
The SEC’s lawsuits against Coinbase and Binance have identified numerous cryptocurrencies, including BNB, BUSD, SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, AXS, COTI, and many others, as securities.
The SEC has also labeled XRP as an unregistered security and has been engaged in a legal battle with Ripple since December 2020, though recent court rulings have favored Ripple.
SEC Stifling US Crypto Industry, No Help From Congress In Sight
Critics argue that the SEC’s aggressive stance is stifling investment and innovation in the US crypto industry, pushing it towards more crypto-friendly jurisdictions overseas.
The US Congress has also not been supportive of the crypto industry. Though a Republican-sponsored bill governing rules for USD-pegged stablecoins has made progress in the House Committee on Financial Services, a lack of bipartisan agreement means its chances of passing through Congress are slim.
Broader crypto legislation, despite bipartisan efforts, is also a long way off.
The year 2024 holds the potential for significant developments in the US crypto regulatory landscape. It could be the year Congress finally passes crypto legislation and progress is made in the SEC’s lawsuits against major exchanges like Coinbase and Binance.
Additionally, the SEC is expected to make a decision on spot bitcoin ETF applications filed by Wall Street giants BlackRock and Vanguard. The agency, which has previously rejected all spot bitcoin ETF applications, may be swayed by new proposal market surveillance mechanisms included in these applications.