Bittrex Calls Out SEC‘s ‘Crusade’ Against Crypto Firms
The SEC’s approach to regulation via enforcement will have a ‘chilling effect’ on US crypto firms, Bittrex said Monday
Source: Shutterstock / Grey82, modified by Blockworks
Bittrex said Monday it is “disappointed” with the SEC’s decision to slap its exchange business with several charges relating to securities violations, claiming the move formed part of chairman Gary Gensler’s “larger crusade” to force crypto out of the US.
The exchange was hit with several charges from the regulator on Monday alleging six tokens available on its platform are considered securities, including Algorand’s native token (ALGO) and the Dash token (DASH). The two tokens have a current market capitalization of $1.6 billion and $664 million respectively.
It comes just weeks after Bittrex announced plans to leave the US for good, citing harsher regulatory conditions than competing jurisdictions as its reason for doing so.
On Monday, the SEC also alleged Bittrex operated as an “unregistered exchange, broker and clearing agency,” during its stint in the US. Bittrex’s former CEO, William Shihara, and international affiliate Bittrex Global GmbH are also on the hook.
“The impact of the SEC’s approach of regulation by enforcement will have a chilling effect on not just cryptocurrency in the United States, but on blockchain technology and innovation in general,” a Bittrex spokesperson said in a statement.
The SEC did not immediately respond to a request for comment.
While in the US, the exchange claims it had conducted its business lawfully by providing a digital asset trading platform and did not violate any charges pertaining to securities or investment contracts.
The exchange said despite numerous occasions to contact the regulator to discuss which assets it considered as securities and would therefore be delisted, the SEC “refused to do so.”
“For over five years, and despite multiple, specific requests to do so, the SEC would not provide notice of the specific conduct that it thought violated the federal securities laws.”
Those words echo Coinbase’s Chief Legal Officer Paul Grewal who, last month, wrote a testimony denouncing Gensler’s approach to crypto regulation.
Grewal said that although the US Exchange Act decrees securities to be traded via an SEC-registered exchange, there currently exists no path for crypto firms to register.
Gensler contests otherwise, claiming the “path to compliance is clear.” That has angered other exchanges, including Bittrex, as well as many of those within the crypto community.
“The SEC’s actions will directly and substantially harm US customers and US employees in this industry and will ultimately put our country at a significant disadvantage in the development of blockchain technology, including uses far beyond cryptocurrency, in the future,” the Bittrex spokesperson said.
Bittrex declined Blockwork’s request for further comment.
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