Benzinga - Crypto exchange Bittrex reached a settlement over allegations of providing U.S. investors with access to unregistered securities.
The agreement entailed a $24 million penalty, to be paid following the submission of the exchange's liquidation plan. Earlier this year, the SEC took legal action against Bittrex, which declared bankruptcy in May, accusing it of operating as a securities exchange, broker, and clearinghouse without the necessary regulatory registrations.
This action by the SEC mirrors similar charges against other crypto exchanges such as Coinbase and Binance.US.
The regulator also claimed Bittrex advised crypto issuers to remove public declarations that could indicate potential securities law infringements.
As per the recent court documents, Bittrex will neither confirm nor refute these claims and is prohibited from insinuating that the SEC's allegations lacked factual grounding.
The $24 million penalty comprised $14.4 million in disgorgement, an additional $4 million as prejudgment interest on the disgorgement, and a $5.6 million civil penalty.
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The payment to the SEC is due within 90 days post the approval of Bittrex's liquidation plan.
If Bittrex fails to settle its dues by March 1 of the upcoming year, the SEC might pursue a court judgment. The settlement terms, as they pertain to Bittrex, require the endorsement of the bankruptcy court and will be recognized as an unsecured claim under any plan Bittrex presents in its bankruptcy proceedings.
SEC Enforcement Director Gurbir Grewal commented on the settlement, emphasizing that mere label changes or description modifications cannot shield one from accountability.
He lauded the SEC team for its proactive stance on non-compliance within the crypto sector, stating, "Today’s settlement underscores the importance of economic realities over terminologies. I commend the SEC team for their diligent efforts in ensuring compliance and safeguarding investors' interests."
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