Despite the start of the closure of its operations in the USA, Bittrexa US-based cryptocurrency exchange, is reportedly facing possible legal action from the Securities and Exchange Commission (DRY). The SEC’s audits division is reportedly considering recommending lawsuits against Bittrex for alleged violations of investor protection laws.
Bittrex receives a Wells Notice as it exits the US market
General Counsel of Bittrex, David Mariasaid the company had received a Wells Notice from the SEC in March, advising it of the possible supervisory action. At that time, the company crypto currencies Seattle-based had already begun to scale back its operations in the United States. The Wells Notice accused Bittrex to operate as an exchange, broker-dealer and clearing house without having registered with the regulator, thus breaking the law.
Maria revealed that Bittrex had discussions with the SEC at the end of 2022 on the recording of its operations. However, the company did not find no viable way to comply with SEC rules without ceasing all income-generating activities in the United States. Counsel argued that the main problem was the lack of clear regulations for cryptosstating: “Lack of regulatory clarity here leads to significant costs and no certainty about what can and cannot be offered.”
Although Bittrex is in the process of ending its operations in the United States, Maria said the company does not know whether the SEC will file a lawsuit. If the regulator decides to take action, Bittrex could plead its case, or accept a reasonable settlement offer as is often the case.
This development comes after Bittrex announced its intention to cease all operations UNITED STATES on March 31, citing the difficult regulatory and economic environment. The platform has asked its US customers to withdraw their funds by April 30, 2023.
Before deciding to exit the US market, Bittrex faced several regulatory issues. In 2022, the company agreed to pay more than $29 million in fines the Office of Foreign Assets Control and the Financial Crimes Enforcement Network of the US Treasury Department. The settlement was linked to sanctions violations in the Crimea region, Cuba, Iran, Sudan and Syria between 2014 and 2017.
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