The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Bittrex, a crypto exchange, and one of its co-founders, William Shihara. The SEC alleges that the company was operating as an “unregistered national securities exchange, broker, and clearing agency.” Bittrex Global GmbH, the exchange’s foreign affiliate, was also named in the suit for failing to register as a national securities exchange in connection with its operation of a single shared order book along with Bittrex.
According to the SEC, Bittrex and Shihara instructed issuer-applicants to delete statements related to “price prediction[s],” “expectation of profit,” and other “investment-related terms” before making an asset available on its platform. The regulator accused the defendants of taking steps to avoid regulatory scrutiny.
The move against Bittrex is the latest in a series of regulatory actions taken by U.S. agencies policing the crypto space. Binance, Paxos, and Kraken are among the crypto companies that have been charged in recent weeks by U.S. regulators.
Bittrex Global has denied the allegations, stating that it has no U.S. customers, has never held itself out as doing business in the U.S. or with U.S. persons, and has disclosed to U.S. persons that they are not permitted to use its exchange. The firm accused the SEC of issuing it a Wells notice, a precursor to formal charges, “without any prior contact whatsoever with Bittrex Global.” Bittrex Global said it would “vigorously defend these allegations in the U.S.”