CEFIREGULATION

SEC collects another $24 million in fines, settles with Bittrex and former CEO

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SEC collects another $24 million in fines, settles with Bittrex and former CEO

The U.S. Securities and Exchange Commission (SEC) announced on August 10th that it has reached a $24 million settlement with Bittrex and its former CEO, William Shihara.

Bittrex Accused of Operating Illegally Without Registration

The U.S. Securities and Exchange Commission (SEC) filed multiple charges against the long-established exchange Bittrex, founded in 2014, in April this year:

  • Bittrex failed to register activities generating over $1.3 billion in revenue

  • Operated without registering as a national securities exchange, broker, and clearing agency

  • Allegations that Bittrex and former CEO deleted "problematic statements" to evade federal securities laws

  • Foreign subsidiary Bittrex Global GmbH also unregistered and shared order book with Bittrex

Recap: U.S. SEC Sues Long-Established Exchange Bittrex for Illegally Sharing Orders with Overseas Subsidiary

Bittrex Faces Heavy Penalties, Subsidiary Previously Bankrupt

As part of a settlement, Bittrex and Bittrex Global have agreed to pay a $24 million fine. This includes:

  • $4 million in pre-judgment interest

  • $5.6 million in civil penalties

  • $14.4 million in illegal gains

Several subsidiaries under Bittrex declared bankruptcy in May and filed for Chapter 11 bankruptcy protection, including:

  • Seattle entity Bittrex, Inc.

  • An affiliate entity Desolation Holdings LLC

  • Two entities in Malta, Bittrex Malta Ltd., and Bittrex Malta Holdings Ltd.

Bittrex Inc. stated that the Chapter 11 bankruptcy protection filing will not affect Bittrex Global's ability to provide normal services to users outside the U.S.

Similarly, related companies Bittrex, Shihara, and Bittrex Global are permanently prohibited from violating securities laws under the settlement agreement, but this does not affect their international business operations.