(Reuters) -Bittrex has agreed to pay $24 million to settle claims by the U.S. Securities and Exchange Commission that the cryptocurrency exchange failed to register with the agency, according to a filing in Seattle federal court on Thursday.
The SEC sued Bittrex Inc and its former CEO William Shihara in April, saying they operated an unregistered national securities exchange, broker and clearing agency.
The SEC also claimed the exchange’s foreign affiliate, Bittrex Global GmbH, failed to register as a national securities exchange in connection with its operation of a single shared order book along with Bittrex.
Bittrex Inc filed for bankruptcy in May. The deal requires the company and Bittrex Global to pay the $5.6 million fine and hand over $18.4 million in allegedly illicit profit 60 days after a liquidation plan is filed in the bankruptcy case.
The companies and Shihara agreed to an order barring them from violating U.S. securities laws. They did not admit to the SEC’s allegations.
A Bittrex spokesperson said the firm was “delighted” to have reached a settlement and would be able to say more after the court has approved the resolution.
The Seattle-based firm had previously denied that securities were traded on its platform. Bittrex Global has said it has no U.S. customers.
The SEC claimed in its lawsuit that Shihara coordinated with crypto asset issuers seeking to make their tokens available for trading on Bittrex’s platform to delete public statements that Shihara believed would lead regulators to investigate those token offerings as securities.
SEC Enforcement Director Gurbir Grewal said the settlement “makes clear that you cannot escape liability by simply changing labels or altering descriptions because what matters is the economic realities of those offerings.”
Shihara called the settlement “a good outcome.”
“It’s vital that our country strikes a balance between fostering innovation, encouraging entrepreneurs and the need to protect consumers, and I hope today’s proposed settlement helps move that forward,” he said.
Source: Economy - investing.com
