In April, the SEC sued Bittrex and its former CEO William Shihara, alleging that he operated an unregistered securities exchange. The regulator also accused the exchange’s foreign affiliate, Bittrex Global GmbH, of failing to register as a broker-dealer.
Due to the complex regulatory environment, Bittrex was forced to stop working with U.S. customers, and in May, the exchange filed for bankruptcy covering several of its subsidiaries.
Although Bittrex did not admit to the SEC’s charges, it agreed to pay a fine to the regulator. The exchange said it was “delighted” with the agreement reached. Shihara called the settlement “a good outcome.”
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“It’s very important that our country finds a balance between encouraging innovation and entrepreneurs, and the need to protect consumers. I hope the proposed settlement will help move that forward,” he said.
SEC spokesman Gurbir Grewal said the agreement “makes clear that companies cannot avoid liability by simply changing their description.”
In July, the Florida Office of Financial Regulation (OFR) accused Bittrex of violating several state laws before filing for bankruptcy. According to court documents, the Bittrex exchange failed to segregate customer assets from the company’s operating capital. Also, Florida authorities accuse the site of ignoring part of its obligations.