The CEO of Bittrex Global, Oliver Linch has declared the company’s intention to fight charges filed against it by the securities and exchange commission (SEC) in court. Linch said the SEC was “mistaken” in charging the exchange with security laws violations.
Bittrex is the latest crypto ccompany that the SEC has sued in the recent crackdown on the industry in the U.S. The SEC’s charges came shortly after the exchange announced that it was moving out of the country. Like many other crypto firms, Bittrex’s decision to move out of the U.S could have been driven by the hostile regulatory climate in the country.
“Bittrex was an entirely separate legal entity and only provided services in the U.S. and only served U.S. customers. And they’re the ones that have had to shut down their operations… Global continues on providing the services to rest-of-world clients as it ever has,” Linch said.
Alleged Illegal Operation of Unregistered Exchange
The chairman of the SEC Gary Gensler recently said that all cryptocurrencies except Bitcoin are securities. This makes any exchange that allows trading of crypto tokens a security exchange, and must be registered and regulated as such, according to Gensler.
It is on this basis that the SEC alleges that the company illegally ran an unregistered securties exchange. Linch however believes this was a mistake and that the company will fiercely fight the allegation which involves Bittrex, its former CEO, and Bittrex Global.
While Bittrex and its former CEO Bill Shihara are charged with not registering the exchange in the U.S, Bittrex Global is charged with not registering as a national securities exchange since it shared its order book with Bittrex in the U.S.
To this, Linch said “We think that they’re mistaken in the way they conceive of it legally and in terms of facts.”
Details of the suit show that the SEC is suing Bittrex for generating $1.3 billion in revenue from trading fees between 2017 and 2022 without registering as a securities exchange. It also alleges connivance between the former CEO and token issuers to shield them from the regulators.
The SEC Facing Legal Battles
The SEC is starting to face legal battles as the crypto space is now fighting back the harsh regulatory approach it is dishing out. Just yesterday 25 April, Coinbase filed a lawsuit against the commission demanding that it provides clear regulations for the industry.
Coinbase’s lawsuit may have contributed towards Bittrex taking the bold step to also challenge the SEC’s allegations in court. One of two things is likely to happen in this scenario. Either the SEC loses and brings regulatory clarity for the industry, or it wins and crypto dies in the U.S as companies exit the country one after another.
As it is, Coinbase is already considering the idea of relocating, and there are jurisdictions that are making their environments more welcoming for crypto companies. Australia and Hong Kong are examples of such jurisdictions that are creating regulations that will foster the growth of the crypto industry.
The UK is the latest, and is different in its own approach. The FCA is calling on crypto firms to collaborate and come up with a regulatory framework that is mutually beneficial. If crypto loses in the U.S, it won’t be long before these crypto giants move to crypto havens like the UK.