Bittrex Exchange is one of the cryptocurrency exchanges that are currently facing a lawsuit from the SEC. The regulatory agency has sued crypto trading platforms left and right raising questions over the future of crypto market development in the region. However, Bittrex exchange has decided to assume the same stance against SEC as Coinbase.
The lawyers of the firm have requested the court to dismiss the lawsuit on grounds of incompetence. To this end, the firm has filed a petition in the court to dismiss the SEC lawsuit in the court as per media news.
During the court filing, Bittrex also shared a statement in the court that SEC has no authority to regulate cryptocurrencies. The firm maintained the SEC jurisdiction is limited to the securities market and products alone unless otherwise stated by Congress.
This type of petition challenges the SEC’s narrative of securities laws and aimed at getting regulatory clarity for cryptocurrencies that are operational in the country at present. Several cryptocurrency exchanges such as Coinbase and Binance are also fighting against SEC for the same charges.
The Securities and Exchange Commission’s current leadership has faced a lot of criticism over its interpretation of cryptocurrencies as unregistered securities. Gary Gensler the current chief of the agency recently declared that everything crypto is an unregistered security.
It is worth noting that no two blockchain and cryptocurrency projects are the same. Using the Securities Act and Howey test to determine the nature of these trading products, in general, is impossible and impractical.
Other cryptocurrency exchanges such as Coinbase have also taken the same stance against SEC in the court. The stance of Bittrex that has taken a page out of Coinbase’s defense is a calculated move on the part of the crypto exchange.
The firm not only seeks to capitalize on the defense argument of the SEC but is also planning to add more weight to the demand of appealing for better cryptocurrency regulations in the country. Coinbase and Bittrex seemed to have assumed a united front against SEC.
The legal team of Bittrex has also identified and highlighted loopholes in the allegations extended by SEC prosecutors.
Bittrex and Coinbase Align their Defense Strategies Against SEC
Bittrex and Coinbase have declared in court that certain crypto sales may be classified as security contracts. However, the firm has maintained that the secondary market trading of digital assets cannot be classified as securities.
To support their argument the crypto exchanges can draw reference from the outcome of the SEC’s lawsuit against LBRY. Bittrex has also maintained that SEC refrained from establishing open and clear communication channels with cryptocurrency exchanges.
The firm maintained that SEC did not issue any warnings or directions concerning the legal misconduct regarding Bittrex operations. SEC charged Bittrex and its co-founder for running an unregistered security exchange in April this year.
SEC has hit several other cryptocurrency exchange platforms with the same complaint within a short time duration. Recently, a former member of the SEC has revealed that the staff at SEC is rapidly decreasing.
It is worth noting that the SEC chief demanded an additional budget for the agency during the congressional meeting earlier this year to bring more lawsuits in the cryptocurrency sector. SEC has also charged Bittrex Global with the same allegations as its local operational wing for American consumers.