SEC Charges Bittrex and its Co-Founder for Operating an Unregistered Securities Exchange

The Securities and Exchange Commission (SEC) today charged crypto asset trading platform Bittrex, Inc. and its co-founder and former CEO William Shihara for operating an unregistered national securities exchange, broker, and clearing agency. The SEC also charged Bittrex Global GmbH, a foreign affiliate of Bittrex, for failing to register as a national securities exchange when it operated a single shared order book along with Bittrex since at least 2014. The SEC alleges that Bittrex earned at least $1.3 billion in revenue from buying and selling crypto assets as securities without registering any of these activities with the Commission, and that Shihara helped to conceal this fact by instructing applicants to delete certain “problematic statements” from their public channels that could have attracted regulatory attention. SEC Chair Gary Gensler stated that this action is meant to hold Bittrex accountable for its lack of regulatory compliance, and send a message to other non-compliant crypto market intermediaries to follow the federal securities laws or face consequences for their violations. An investigation into this matter was conducted by various members of the Division of Enforcement and the Market Abuse Unit, with litigation being conducted by Christopher Carney, Ben Kuruvilla, Daphna Waxman, Pamela Sawhney and supervised by Ladan Stewart and Olivia Choe.