The SEC recently charged Bittrex and its former CEO, William Shihara, with multiple charges. Now, the commission has announced the exchange settling the charges.
According to the latest post by the SEC, Bittrex and Shihara are settling charges for operating an unregistered clearing agency, exchange, and broker. The foreign affiliate of Bittrex Inc., Bittrex Global, has also agreed to settle the charges about failing to register as the national securities exchange.
The US Securities and Exchange Commission filed the charges back in April 2023. The complaint stated that Bittrex has been acting as an unregistered clearing agency, broker, and exchange. At the same time, the platform has been offering services related to crypto assets that are sold as securities.
The complaint further states that Shihara and Bittrex guided issuers interested in listing assets on Bittrex. The parties directed the issuers to delete several statements that the former CEO believed could be problematic. The latest settlement ends with Bittrex neither admitting nor denying the allegations.
Gurbir Grewak, the Director of the Division of Enforcement at the SEC, also talked about the development. According to Grewal, Bittrex has collaborated with multiple token issuers for years. The platform has scrubbed their statements that indicated their investment contracts.
Such efforts were made to avoid federal securities laws. The settlement has made it clear that platforms cannot avoid liability by altering descriptions or changing labels. What matters is the economic reality of the products, added Grewal.
The settlement is subject to court approval, but it states that Bittrex and other defendants are consenting to enter final judgments. This will permanently enjoin Shihara and Bittrex from violating Sections 5, 17A, and 15(a) of the 1934 Securities Exchange Act.
Bittrex Global and Bittrex have also agreed to pay 14.4 million dollars for disgorgement, a civil penalty of 5.6 million dollars, and prejudgment interest of 4 million dollars. The total monetary payment stands at 24 million dollars for Bittrex and affiliates.