Crypto Exchange Bittrex To Pay $24 Mn in Fine to SEC Seeking Truce

a mobile phone screen showcasing Bittrex Global logo

Cryptocurrency platform Bittrex has reached a resolution in a case involving allegations of providing unauthorized securities access to American investors. As part of the settlement, the company has consented to a $24 million penalty, which is slated for payment within a span of two months following the submission of a comprehensive liquidation strategy for the exchange.

The U.S. Securities and Exchange Commission (SEC) initiated legal action against Bittrex, a cryptocurrency exchange that entered bankruptcy proceedings in May. The lawsuit, filed earlier this year, alleges that Bittrex unlawfully conducted operations as a securities exchange, broker, and clearinghouse, all while failing to obtain proper registration for these roles from the regulatory authority.

The U.S. Securities and Exchange Commission (SEC) has leveled comparable accusations against other cryptocurrency platforms, including Coinbase and Binance.US. In addition to these claims, the SEC asserted that Bittrex instructed cryptocurrency issuers to remove public statements that could potentially indicate a violation of securities regulations by their tokens.

In accordance with the court documents submitted on Thursday, Bittrex has opted for a stance of neither accepting nor refuting the accusations made. The company is also restricted from issuing any public statement that could imply the U.S. Securities and Exchange Commission (SEC) lacked a substantiated foundation for its claims. Out of the entire $24 million penalty, a significant portion, specifically $14.4 million, accounts for disgorgement. An additional $4 million represents prejudgment interest on the aforementioned disgorgement, while $5.6 million constitutes civil money penalties.

Bittrex is granted a window of up to 90 days following the implementation of its liquidation strategy to fulfill its payment obligations to the SEC. However, in the event that the company fails to settle its fees and penalties by March 1 of the upcoming year, the regulatory body reserves the right to pursue a court judgment.

The recent filing stated that the defendants have concurred that the conditions outlined in the settlement, as presented in the Consent and Judgment, are contingent upon the Bankruptcy Court's endorsement within the Bankruptcy Case. Additionally, these terms are to be regarded as an acknowledged, unsecured claim, as per the specifications of any Plan submitted by Bittrex as part of the ongoing Bankruptcy Case.

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