- Bittrex is facing regulatory scrutiny from SEC for violating investor protection laws.
- Crypto exchanges, including Coinbase and Kraken were targeted by regulators, as per John Reed Stark.
- Bittrex received a Wells Notice for operating without registering with SEC and is winding down US operations.
Bittrex, a digital asset exchange in the US, is facing scrutiny from the Securities and Exchange Commission (SEC), causing concern within the cryptocurrency community. The SEC alleges that Bittrex has breached investor protection laws, resulting in the exchange winding down its US operations.
Experts indicate that the crypto industry has long been grappling with regulatory concerns, and the recent action taken by the SEC against Bittrex only adds to the community’s worries. The SEC’s crackdown on Bittrex, as well as on other exchanges like Coinbase and Kraken, highlights how regulators are now turning their attention toward crypto exchanges after focusing on companies that issue digital currencies for years.
John Reed Stark of John Reed Stark Consulting LLC shared that the SEC has sent Bittrex a Wells Notice for allegedly failing to register as an exchange, broker-dealer, and clearinghouse, which has resulted in the exchange moving its operations offshore.
Moreover, the Wall Street Journal also published a report recently discussing how Bittrex shut down due to regulatory pressures and about its decision to permanently exit the US market.
Additionally, the SEC initiated an investigation into Bittrex back in 2017 as part of a broader examination of the emerging crypto industry. Since then, the agency has issued numerous subpoenas to Bittrex to better understand the exchange’s revenue streams and criteria for selecting which assets to list.
According to the Wells notice sent by the SEC attorneys, Bittrex is accused of violating laws by operating as an exchange, broker-dealer, and clearinghouse without registering with the agency. Under US law, companies offering securities to investors must register with the SEC and adhere to rules aimed at safeguarding investors’ funds, as well as disclosing fees and risks.