Bittrex, a crypto asset trading platform, and its former CEO William Shihara has been charged by the US Securities and Exchange Commission (SEC) for running an unregistered national securities exchange, broker, and clearing agency. Bittrex Global GmbH, a foreign affiliate of Bittrex, has also been charged for failing to register as a national securities exchange.
According to the SEC, Bittrex and Shihara coordinated with issuers to remove certain “problematic statements” to avoid regulatory scrutiny. Bittrex earned at least $1.3 billion in revenues from servicing investors as a broker, exchange, and clearing agency without registering any of these activities with the Commission.
SEC Names 6 Tokens as Securities
OMG Network (OMG), Dash (DASH), Algorand (ALGO), Monolith (TKN), Naga (NGC), and Real Estate Protocol (IHT) have all been named in the Bittrex lawsuit as securities. Following the release of the lawsuit, Algorand experienced a 2.5% drop to $0.22. However, the crypto community remains optimistic that the SEC will lose the case, and that price fluctuations are only temporary.
Bittrex responds to SEC’s action
Bittrex has stated that they have been requesting clarification from the SEC regarding securities, but have yet to receive a clear response. Despite their plans to cease operations by April 30th, the SEC is now taking legal action against them. Many believe that the SEC is attempting to push cryptocurrency out of the United States
Conflict Arises
Richie Lai, the co-founder of Bittrex, has tweeted about the SEC’s charges against the company, stating that they had been trying to work with the regulator for years to determine which crypto assets were securities. He further noted that the SEC filed the lawsuit against the company after it announced plans to leave the US, which is not how governments are supposed to work. Lai also mentioned that they look forward to fighting the charges in court.
The Need for Cohesion in the Crypto Industry
Cryptocurrency commentator and lawyer Jeremy Hogan has weighed in on the Securities and Exchange Commission (SEC) charges against Bittrex, saying that the SEC is hoping for a quick win to establish that the six tokens in question are securities.
Hogan suggests that the Algorand Foundation and the other five projects should intervene in the lawsuit under Rule 24 and fight together against the SEC. He also recommends that if the projects do not fight voluntarily, Bittrex should move to bring them in with a Motion to Dismiss for failure to add an indispensable party (Rule 19) and force the SEC to bring them in.
Hogan believes that the exchanges and projects must work together or face the consequences separately. He also argues that Bittrex cannot successfully argue that Algo or another token is not a security and that the projects must unite to fight against the SEC’s allegations.
Source: https://coinpedia.org/news/bittrex-and-former-ceo-charged-by-sec-6-tokens-named-as-securities/