The Wall Street Journal has reported that Bittrex, a cryptocurrency exchange, has received a notice from the US Securities and Exchange Commission (SEC) regarding the possibility of being forced to cease operations for not registering with the agency.
Bittrex General Counsel David Maria confirmed that the exchange was notified by the SEC’s enforcement department in March, with the regulator claiming that Bittrex lacks permission to operate as a broker-dealer and trading platform.
The news follows Bittrex’s decision to stop serving US customers due to the challenging regulatory and economic environment in the country.
According to David Maria, Bittrex considered registering with the SEC towards the end of last year.
But the exchange’s management ultimately concluded that the lack of regulatory clarity in the industry would result in significant costs and uncertainty about the products and services that could be offered to US citizens.
Although Bittrex’s lawyers doubt that the SEC will take legal action against the exchange for selling unregistered securities since the company is already winding down its activities in the US.
They are prepared to defend their case in court if the regulator fails to resolve the matter reasonably.
In the past, the SEC has already fined Bittrex for violating US sanctions by failing to trace suspicious cryptocurrency transactions originating from countries such as Cuba, Iran, Sudan, Syria, and Crimea.
In a similar development, the SEC has also sent a notice to Coinbase in March seeking clarification on the Coinbase Earn and Coinbase Prime programs and the Coinbase Wallet wallet.