Established in 2013, Bittrex was a pioneering cryptocurrency exchange, providing a platform to buy and sell various digital currencies.
Bill Shihara, Richie Lai, and Rami Kawach founded Bittrex after working at tech giants like Microsoft and Amazon.
- Security: Bittrex prioritizes security. The team ensures that most customer funds reside in cold storage, making them less susceptible to online threats.
- Regulatory Compliance: Bittrex actively aligns with U.S. regulations. This dedication attracts institutional investors and occasionally leads Bittrex to delist certain tokens potentially viewed as securities.
- Altcoin Selection: During the 2017 cryptocurrency boom, Bittrex gained popularity due to its extensive altcoin offerings. Traders looking to invest in newer or lesser-known tokens often turned to Bittrex.
- Delisting of Coins: Bittrex has removed many tokens over the years due to regulatory pressures or internal decisions, causing frustration among some users.
- Competitive Landscape: They faced competition from rising exchanges like Binance, Huobi, and KuCoin. These competitors sometimes offer similar or better services, liquidity, or fees.
- User Experience Issues: Some users have raised concerns about Bittrex’s platform, ranging from UI/UX gripes to customer service challenges.
- Regulatory Headwinds: Navigating the complex and shifting regulatory landscape, especially in the U.S., has led Bittrex to limit services in certain areas or to launch separate platforms for U.S. users.
SEC Settlement Overview
In a significant regulatory move, Bittrex. settled with the U.S. Securities and Exchange Commission (SEC) over charges of offering U.S. investors access to unregistered securities.
- Charges: The SEC initiated legal action against Bittrex, accusing the exchange of operating as a securities exchange, broker, and clearinghouse without proper registration.
- Bankruptcy: Before the SEC’s action, Bittrex had filed for bankruptcy in May.
- Fine Amount: Bittrex consented to pay a fine of $24 million within two months of presenting its exchange liquidation plan.
- Breakdown of Fine:
- Disgorgement: $14.4 million
- Prejudgment interest: $4 million
- Civil penalties: $5.6 million
- Terms of Agreement: Bittrex will neither confirm nor refute the SEC’s allegations under the settlement’s terms. Furthermore, the exchange must abstain from making public remarks suggesting the SEC lacked factual grounds for its claims.
- Payment Schedule: The liquidation plan dictates that Bittrex’s bankrupt U.S. division has a 90-day window post-effectiveness to remit payment to the SEC. Should Bittrex fail to meet its financial obligations by March 1 of the ensuing year, the SEC reserves the right to seek court intervention.
Related SEC Actions
The SEC has pursued analogous actions against other leading crypto exchanges:
- Coinbase: Faced similar charges.
- Binance.US: Also contended with comparable allegations.