The Bittrex crypto exchange and its co-founder, William Shikhara, are facing legal action from the US Securities and Exchange Commission (SEC).
The regulator has filed a lawsuit in the US District Court for the Western District of Washington, claiming that Bittrex allowed the trading of six cryptocurrencies, including OMG, DASH, ALGO, TKN, NGC, and IHT, which the agency considers to be unregistered securities.
The SEC alleges that Bittrex did not register with the agency as a securities exchange, broker-dealer, and clearing agency.
The complaint states that the exchange earned at least $1.3 billion in revenue between 2017 and 2022, including commissions for transactions made by American investors.
The lawsuit also accuses Bittrex and its former CEO, William Shihara, of working with the issuers of these crypto assets and advising them to remove “problematic claims” related to price forecasts and earnings expectations from their marketing materials and public channels.
SEC Chairman Gary Gensler criticized the non-compliance with regulations in the cryptocurrency market and stated that Bittrex and the issuers of digital assets knew the rules that applied to them but chose to evade them.
Bittrex’s legal adviser previously doubted that the agency would file a lawsuit against the platform, as it had stopped operating in the US due to regulatory challenges.
The exchange’s management had previously identified the UAE as the most favorable jurisdiction for cryptocurrency business development.