The Wall Street Journal reported that Bittrex, based in the US, could face legal action from the SEC over these violations.
David Maria, the chief legal counsel for the platform, stated that the SEC’s enforcement division had warned Bittrex of the violations back in March. By that time, the company had already started the process of winding down its operations in the US.
The Law Violation
As per the SEC’s notification, Bittrex violated laws by functioning as an exchange, broker-dealer, and clearing agency without registering with the regulatory authority. However, David Maria stated that Bittrex was in talks with the SEC to register its activities by the end of last year but could not comply with the commission’s regulations while conducting its business.
According to the lawyer, the reason for the platform’s failure to comply with the regulator’s rules is primarily due to the SEC’s lack of clear guidelines on conducting activities related to cryptocurrencies. This ambiguity in regulation causes considerable costs and uncertainty about what Bittrex can offer to its customers.
Furthermore, Maria clarified that Bittrex is not aware of any possible lawsuit from the SEC. In case the regulator takes legal action against the platform, it will respond in court.
The End of Bittrex
Last month, Bittrex, a crypto exchange, announced that it would be discontinuing its operations in the United States due to “regulatory uncertainty.” However, the platform assured its customers that all of their funds are safe and must be withdrawn by April 30.
Bittrex had previously come under the radar of US regulators.
In October of last year, the US Department of the Treasury and the Financial Crimes Enforcement Network fined Bittrex $24 million and $29 million, respectively. The regulatory agencies claimed that the platform was in violation of anti-money laundering requirements and banking secrecy laws. Additionally, regulators alleged that Bittrex was in violation of sanction requirements.