The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against the crypto exchange Bittrex over the violation of U.S. investor protection laws.
The firm recently announced that it would gradually halt its operations in the U.S. by the end of April due to the current regulatory environment.
- The lawsuit also named former Bittrex CEO Bill Shihara and Bittrex Global GmbH as defendants.
- The SEC claims that the Seattle-based crypto exchange violated investor protection laws by running as an exchange, broker-dealer, and clearinghouse at the same time without registration.
- Bittrex general counsel David Maria recently disclosed that the agency's enforcement unit informed Bittrex about a potential action through a Wells notice before the crypto exchange started the process of halting U.S. operations.
- Maria added that Bittrex would make a counterclaim if SEC takes legal action and does not come with a reasonable settlement offer.
- The general counsel also revealed that Bittrex had already negotiated with the SEC in late 2022 and then decided to wind down its operations in the U.S. since the agency did not provide clear regulations for registration and the crypto industry.
- A Wells notice refers to a letter sent by the SEC after an investigation to inform about a possible enforcement action and does not always result in charges.
- The popular crypto exchange Coinbase was also recently served a Wells notice by the SEC about further action over a potential violation of securities laws through its exchange and staking services.
