- Bittrex operated a clearinghouse, a brokerage, and a securities exchange
- They will pay the fine within three months of filing a liquidation plan
Bankrupt crypto exchange Bittrex agreed to pay a fine of $24 million to settle charges brought against it by the US Securities and Exchange Commission (SEC). In its lawsuit, SEC accused Bittrex of selling US investors unregistered securities. The exchange will pay the fine within three months of filing a liquidation plan. It declared insolvency in May.
Exchange accepted the charges
The exchange admitted it simultaneously operated a clearinghouse, a brokerage, and a securities exchange without registering as any of these services with SEC. Crypto exchanges Coinbase and Binance face the same charges.
Additionally, the SEC accused Bittrex asked crypto issuers to delete any public information that could provide evidence that their tokens were potentially in breach of securities laws.
According to a court filing on August 10 cited by CoinDesk, Bittrex will not offer any public information that could indicate the regulator’s accusations weren’t grounded in actual facts.
Disgorgement accounts for bulk of fine
Disgorgement, or the legally mandated repayment of ill-gotten gains, comprises the bulk of the fine. Of the $24 million, disgorgement accounts for $14.4 million, and the interest on it is $4 million. The exchange must also pay penalties of $5.6 million.
Bittrex has to pay SEC the fine within 90 days of its liquidation plan taking effect. If it hasn’t made payment by March 1, 2024, the SEC can seek another decision by the court. The filing states:
Defendants agree that, as to Bittrex, the terms of the settlement reflected in this Consent and in the Judgment are subject to approval by the Bankruptcy Court in the Bankruptcy Case and shall be treated as an allowed, unsecured claim under the terms of any Plan filed by Bittrex in the Bankruptcy Case.
In a statement, SEC Enforcement Director Gurbir Grewal expressed gratitude to SEC staff for their “aggressive” pursuit of legal transgressions by crypto firms, for resolving the concrete issue with Bittrex, and for bringing victims additional relief.
