Crypto asset trading platform Bittrex, and its co-founder and former CEO, William Shihara, have agreed to pay $24m to settle Securities and Exchange Commission charges that they operated an unregistered national securities exchange, broker, and clearing agency.
Bittrex’s foreign affiliate, Bittrex Global, has also agreed to settle charges that it failed to register as a national securities exchange.
While neither admitting nor denying the charges, Bittrex and Bittrex Global have agreed to pay, on a joint and several basis, disgorgement of $14.4 million, prejudgment interest of $4 million, and a civil penalty of $5.6 million.
As part of the settlement, which is subject to court approval, the defendants have also consented to entry of final judgments that permanently enjoin Bittrex and Shihara from violating Sections 5, 15(a), and 17A of the Securities Exchange Act of 1934 and enjoin Bittrex Global from violating Section 5 of the same Act.
As alleged in the SEC’s complaint filed on 17 April, 2023 in US District Court for the Western District of Washington, Bittrex acted as an unregistered broker, exchange, and clearing agency by providing services to US investors in connection with crypto assets that the SEC’s complaint alleges were offered and sold as securities. The complaint further alleges that Bittrex and Shihara, who was the company’s CEO from 2014 to 2019, directed issuers who sought to have their crypto assets made available for trading on Bittrex’s platform to first delete from public channels certain “problematic statements” that Shihara believed would lead a regulator, such as the SEC, to investigate whether the crypto asset was offered and sold as a security.
