Recent court documents reveal that Bittrex’s U.S. branch has sought the dismissal of the lawsuit instituted against it by the U.S. Securities and Exchange Commission (SEC). Legal representatives for Bittrex contend that the SEC does not possess the authority to regulate cryptocurrencies as securities without congressional consent.
In the middle of April 2023, the SEC brought a lawsuit against the U.S. operations of Bittrex’s crypto exchange for allegedly running an unregistered exchange, broker, and clearing agency. SEC Chair Gary Gensler stated that the regulatory body was “holding Bittrex to account for its noncompliance”. A fortnight later, the U.S. operations of Bittrex lodged a Chapter 11 bankruptcy protection petition. Now, the legal counsel for Bittrex is calling for the dismissal of the SEC lawsuit against the firm.
The counsel posits that the status of tokens as securities in the U.S. is a “prominent issue” that remains undefined and unanswered. Bittrex further argues that the SEC did not offer adequate notice regarding the alleged infractions of securities laws. The lawyers defending the crypto exchange reproach the securities regulators for conducting a six-year probe without identifying a single illicitly listed crypto asset token until mid-April 2023. “Yet the Commission is still lacking crucial components of its accusations,” Bittrex commented in its dismissal plea.
The plea for dismissal hinges on three grounds. Firstly, it underscores the unsettled matter of whether tokens should be subjected to securities regulations, as proposed by the SEC. Lawyers stress that this matter warrants the intervention of congressional heads, rather than a decision by the SEC or the court alone. Secondly, Bittrex highlights that the complaint lacks substantial evidence to substantiate the allegation that any secondary-market transactions carried out on Bittrex’s platform involved securities.
Finally, the lawyers maintain that the SEC’s vague depiction of the alleged impropriety has denied Bittrex a proper alert regarding the allegations levelled against it. Bittrex’s dismissal plea aligns with Coinbase’s 177-page counter-argument, which purports that the SEC’s enforcement measures infringe upon due process and the constitutional separation of powers. The Bittrex dismissal plea echoes the sentiment expressed in Coinbase’s argument, asserting the SEC lacks the “explicit congressional endorsement” required to extend securities laws to tokens under the major questions doctrine.
Frequently Asked Questions (FAQs) about Bittrex SEC Lawsuit Dismissal
What is Bittrex’s stance in the lawsuit filed against it by the SEC?
What are the main points of contention that Bittrex highlights in its dismissal plea?
In its plea for dismissal, Bittrex underlines three main points: The unresolved issue of whether tokens should be subjected to securities regulations, the lack of substantial evidence proving that secondary-market transactions on Bittrex’s platform involved securities, and the SEC’s inadequate definition of the alleged misconduct which deprived Bittrex of proper notification regarding the claims made against it.
What connection is there between Bittrex’s dismissal plea and Coinbase’s argument?
Bittrex’s dismissal plea is in alignment with Coinbase’s 177-page argument. Both cryptocurrency exchanges assert that the SEC’s enforcement actions infringe upon due process and the constitutional separation of powers, stressing the lack of “clear congressional authorization” necessary to apply securities laws to tokens.
What major action has Bittrex taken aside from seeking the dismissal of the SEC lawsuit?
In addition to seeking dismissal of the SEC lawsuit, Bittrex’s U.S.-based exchange filed for Chapter 11 bankruptcy protection two weeks after the lawsuit was brought against them.
How long has the SEC been investigating Bittrex before bringing a lawsuit against it?
The securities regulators have been conducting a six-year investigation into Bittrex’s activities before filing the lawsuit. However, Bittrex’s legal team criticized them for not identifying a single unlawfully listed crypto asset token until mid-April 2023.
More about Bittrex SEC Lawsuit Dismissal
- Bittrex Official Website
- U.S. Securities and Exchange Commission (SEC)
- Information on the SEC’s regulatory role over cryptocurrencies
- Congressional approval process
- Chapter 11 Bankruptcy
- Coinbase’s stance on the SEC’s enforcement actions