“Extra! Extra! Another Crypto Exchange Sued by the SEC. Gensler may soon be on the bones of his arse. Read all about it!” I heard being shouted by the mail bot like a 1930’s paper boy. Well, it was really the Discord notification sound I heard with a message from a friend about this development.
The crypto community has recently been shaken by the news of a high-profile lawsuit brought by the U.S. Securities and Exchange Commission (SEC) against the once-prominent crypto exchange Bittrex and its former CEO, William Shihara. This legal action by the SEC highlights the need for stricter compliance in the world of cryptocurrencies, putting other non-compliant platforms on alert.
Bittrex shared this with their community on Twitter:
April 17, 2023
The SEC’s charges against Bittrex focus on the company’s alleged operation of an unregistered securities exchange, broker, and clearing agency.
Seattle Based US Crypto Exchange Sued
Bittrex is not the first crypto exchange sued by the SEC. They went after Beaxy, Coinbase, Genesis Global Capital and Gemini Trust Company to name a few. It certainly seems they are hell-bent on choking crypto out of the USA.
According to the SEC, Bittrex knowingly circumvented federal securities laws and earned more than $1.3 billion in revenue from transaction fees between 2017 and 2022 without proper registration. Some would argue that this highlights the importance of crypto exchanges operating within the confines of the law and the need for a comprehensive understanding of regulatory requirements.
“All they seem to want, in my opinion, is their pound of unearned flesh. Regulating and taxing innovations they didn’t come up with themselves. Innovations they had zero creative or functional input on, took no risk to develop with, and had no skin in the game in the form of investment or equity.”
“It is tantamount to racketeering. But they have the guns, uniforms, and the legislators of their side. So, what is there to do? Leave for greener pastures. Take your money, talent, and economic energy to a country that will respect the value you create. Build where you are welcome. Live long, and prosper.”unTLDR
In addition to these charges, the SEC claims that Bittrex coordinated with crypto issuers to delete “problematic statements” that could have attracted regulatory scrutiny. By instructing issuers to remove information from their offering materials that suggested the coins were securities, Bittrex was able to avoid SEC investigation.
SEC Chair Gary Gensler emphasized that he believes the primary issue with the crypto markets is a lack of regulatory compliance rather than a lack of regulatory clarity. The result: crypto exchange sued after being fined $29 million previously over a failure to bend the knee to US money laundering and sanction laws.
Come in Boat Number 9, Your Time is Up!
Congressman, Warren Davidson, of Ohio’s 8th District, seems to have the SEC and Gary Gensler in his sights.
After announcing in a rather casual manner that reform is more than needed, and legislation is to be introduced to remove the Chair of the SEC and instead provides for an Executive Director which would report to the Board (where authority resides). The kicker being that former Chairs of the SEC would be ineligible.
Yep. To correct a long series of abuses, I am introducing legislation that removes the Chairman of the Securities and Exchange Commission and replaces the role with an Executive Director that reports to the Board (where authority resides). Former Chairs of the SEC are ineligible. https://t.co/VBnkgt8bhM— Warren Davidson 🇺🇸 (@WarrenDavidson) April 16, 2023
Now, I agree that these recent events signal the urgency for crypto exchanges and their users to ensure they are adhering to all applicable laws and regulations. Particularly if they don’t indented to pack up and go elsewhere.
As we learn more about the crypto exchange sued by the SEC, the lawsuit against Bittrex sends a strong message that regulators will not tolerate exchanges operating outside the confines of the law, even as some platforms argue that they are doing so due to regulatory uncertainty.
Bittrex has already announced its decision to exit the U.S. market by the end of April, citing continued regulatory uncertainty as the reason. This decision underscores the challenges faced by crypto exchanges operating in a constantly changing regulatory landscape, where the rules and requirements can sometimes be ambiguous.
“Regulatory uncertainty may or may not be the truth, in my opinion. If it were me, and I was running Bittrex, I would move the business out of the US and register in a jurisdiction that welcomed the efforts of the business to grow opportunities in the market, and employ locals. Imagine the generational wealth and community growth a business like Bittrex could bring to a hospitable nation. I hear that El Salvador is looking favorable for tech businesses these days.”unTLDR
Next week, I’ll be sending a bill to congress to eliminate all taxes (income, property, capital gains and import tariffs) on technology innovations, such as software programming, coding, apps and AI development; as well as computing and communications hardware manufacturing.— Nayib Bukele (@nayibbukele) March 24, 2023
And the result? Nayib Bukele is a man of his word.
Done ✅ https://t.co/5CD6l3xJlC pic.twitter.com/vzKJ5rI3qv— Nayib Bukele (@nayibbukele) March 31, 2023
With the SEC’s recent actions, it is evident that the regulator is taking a proactive, and arguably aggressive, stance in policing the crypto market. More stick, less carrot.
Crypto exchanges, along with their users, must stay vigilant in understanding and adhering to the rules governing their operations. It is vital for crypto enthusiasts to educate themselves on the legal requirements and risks associated with digital currencies, as ignorance could lead to disastrous consequences.
In the wake of the Bittrex lawsuit, it is important for individuals and businesses operating in the cryptocurrency space to have access to accurate and up-to-date information on compliance requirements.
This is where unTLDR steps in, providing crypto education to help customers learn how to manage their own crypto portfolios while staying compliant with the ever-evolving regulatory landscape. We don’t offer financial or legal advice, we only offer education on the topic of Bitcoin and cryptocurrency.
The thing is, once you orange pill, like Pringles, it’s hard to stop.
Falling down the #Bitcoin rabbit hole. pic.twitter.com/kUwQX7rfLA— Carl ₿ MENGER ⚡️🇸🇻 (@CarlBMenger) April 16, 2023
“Regardless of what is happening in the US, I firmly believe that as the world wakes up to the BS that has been going on, more and more people will opt for a money that they believe they can trust. One that is separate from the State. And rightly so in my opinion. This is about more than a crypto exchange sued for failing to comply.”
“Governments around the world, for the very large part, have demonstrated for decades that they can’t be trusted with the purse strings. That’s why I believe Bitcoin will either win in the end, or be the seed for change that is long overdue.”unTLDR
Need a reference point for that?
Why I’m collecting multiple passports for my family & choosing to live where I’m treated best #ElSalvador pic.twitter.com/aPM5RP7Drc— Shannen 🍉 (@ShannenPill) April 14, 2023
Couldn’t have said it better, Shannen.
With an expert understanding of the complexities of the crypto world, unTLDR empowers its customers to navigate the cryptocurrency markets with confidence, making informed decisions based on a thorough comprehension of the laws and regulations that govern these markets.
The Bittrex lawsuit serves as a stark reminder that the SEC will not hesitate to flex and enforce its regulatory authority over crypto exchanges that fail to comply with federal securities laws.
By ensuring that they understand and adhere to the complex web of legal requirements, crypto enthusiasts can not only protect themselves from potential penalties and litigation but also contribute to the maturation and legitimacy of the cryptocurrency market as a whole.
In conclusion, the recent lawsuit and Bittrex crypto exchange sued by the SEC sends a clear signal to the crypto community that regulatory compliance is not optional.
By staying informed and vigilant in following the rules that govern the crypto market, exchanges and investors alike can avoid costly legal battles and help foster a thriving and transparent digital currency ecosystem.
Crypto education platforms like unTLDR play a crucial role in bridging the knowledge gap, ensuring that crypto enthusiasts are well-equipped to navigate the ever-changing landscape of digital currencies and discuss the laws that govern them more proficiently with industry experts.