The Seattle-based crypto exchange Bittrex is set to face legal actions imposed by the US Securities and Exchange Commission (SEC). The SEC issued a report on April 16 revealing plans to subject Bittrex to legal action for contravening the US investors’ protection rules.
According to the Well Notice Bittrex is accused of violating SEC regulations when providing crypto services. Per the regulation for a crypto firm to operate in America, the investor is required to meet the regulatory requirements.
Importance of Upholding Investor Protection Regulations
An analysis issued by the SEC in March revealed that the regulators had informed the crypto firm of the awaiting legal action. The report was shared when the embattled crypto firm planned to sunset its operation in the American markets.
In a previous announcement, the general counsel at Bittrex, David Maria, confirmed that the crypto firm had planned to comply with the registration requirements in 2022. After examing the regulatory requirements, the crypto exchange opted to wind down all the revenue-generating projects in the US to uphold compliance.
Bittrex’s non-conformity with the SEC laws tasked the legislators to examine the cause of the regulation violation. Attorney Maria revealed that unclear crypto regulations in the US caused Bittrex non-compliance.
Citing the US regulation Attorney Maria noted that the SEC was required to provide substantial evidence concerning the Bittrex misconduct. The law allows the Bittrex team to submit a claim to the US court if SEC failed to provide enough proof.
He argued that lack of clarity in crypto regulations had exposed the investors to huge operation costs. Maria regretted that even after Bittrex closed operation in the US; the SEC failed to drop their charges against the crypto exchange.
Bittrex Violates SEC Laws
On March 31, the Bittrex team suspended its operations in the US following regulatory pressure. During the closure, the Bittrex team lamented that the macroeconomic impulses in the US necessitated the crypto exchange to wind down the operation.
The report urged the Bittrex customers to withdraw their funds before April 30. Before the closure of Bittrex US, the team had settled a court fine amounting to $29 million for violating the regulations.
The penalties were paid in 2021 after Bittrex was caught under fire by the US Treasury Department for violating the anti-money laundering (AML) regulations. The Treasury observed that the Bittrex system for monitoring crypto transactions failed to support compliance.
Before the court ruling, the Treasury examined the suspicious crypto transactions conducted in Syria and Iran through Bittrex platform.
In 2017, the Bittrex team suspended plans to pursue new customers to prioritize complying with the AML regulations. Following this, the surge in Bitcoin prices during the previous bull run prompted the Bittrex team to pursue new markets and increase the clientele.
A publication on the Kaiko platform dated December 2017 revealed that the trading activity on the crypto exchange increased to $ 3.1 billion. The market performance recorded in 2017 pushed the Bittrex to rank among the top three largest digital assets service providers globally.