Bittrex reaches settlement with SEC Agrees to pay $24 million fine

Bittrex settles with SEC, pays $24 million fine.

Author: Nikhilesh De, CoinDesk; Translation: Song Xue, LianGuai

On Thursday, cryptocurrency exchange Bittrex reached a settlement with the U.S. Securities and Exchange Commission (SEC) over allegations of offering unregistered securities to U.S. investors. The exchange agreed to pay a fine of $24 million within two months of submitting a liquidation plan.

The SEC filed a lawsuit earlier this year in May against Bittrex, which had filed for bankruptcy, claiming that it operated as a securities exchange, broker, and clearinghouse without registering with regulatory authorities.

The SEC has made similar accusations against other cryptocurrency exchanges Coinbase and Binance.US. The SEC further alleged that Bittrex instructed cryptocurrency issuers to remove public statements that could imply their tokens may violate securities laws.

According to court documents filed on Thursday, Bittrex neither admits nor denies these allegations and cannot make any public statements that might suggest the SEC’s accusations lack factual basis. The total amount of the $24 million fine includes $14.4 million in disgorgement, $4 million in prejudgment interest, and $5.6 million in civil penalties.

Bittrex must make the payment to the SEC within 90 days of its liquidation plan becoming effective. However, if the fees and fines remain unpaid by March 1st next year, the regulatory agency may seek a court judgment.

“Defendant agrees that, as to Bittrex, the settlement terms reflected in this Agreement and Judgment shall be subject to approval by the Bankruptcy Court in the Bankruptcy Case and shall be deemed allowed unsecured claims under any plan provisions submitted by Bittrex in the Bankruptcy Case,” the document states.

The Director of the SEC’s Enforcement Division, Gurbir Grewal, stated in a statement, “Today’s settlement makes it clear that you cannot evade responsibility by simply changing labels or altering descriptions, as what matters is the economic reality of these products.” “I commend SEC staff for actively pursuing misconduct in the cryptocurrency industry, resolving this matter, and bringing additional compensation to harmed investors.”

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