On Monday, the U.S. Securities and Exchange Commission charged a crypto exchange called Bittrex, and its former CEO, with operating an unregistered securities exchange, broker and clearing agency. It earned at least $1.3 billion between 2017 and 2022, the SEC said. Bittrex said it has no U.S. customers and plans to “vigorously defend” the SEC’s allegations in court.
The Bittrex charges are just one in a series of crackdowns by the SEC, which has stepped up its action against the crypto industry after investors lost billions in last year’s blowups (see: Terra and Luna, Three Arrows Capital, Voyager, Celsius, FTX, BlockFi). While the crypto industry and some lawmakers have criticized the SEC’s moves, other lawmakers and investor advocates have welcomed them.
Speaking at a conference in London, the CEO of Coinbase (which the SEC threatened to sue in March) said that clarity about regulation was needed in the U.S. and UK, otherwise crypto firms would be built in “offshore havens”.
But Gary Gensler, the SEC chair, said that the action against Bittrex is an example of how “crypto markets suffer from a lack of regulatory compliance, not a lack of regulatory clarity.”
On Tuesday, Gensler testified in front of Republican lawmakers. The lawmakers said the SEC’s action in areas including crypto was stifling financial innovation. Gensler maintained that most cryptocurrencies are securities and that crypto firms must comply with securities laws. “I’ve never seen a field that’s so non-complying with laws written by Congress and affirmed over and over by the courts,” he said.
The SEC also voted last week to take additional comments from the public about its proposal to expand the definition of a crypto “exchange”, after crypto firms criticized the plan as vague. At the heart of the issue is the extent to which so-called “decentralized finance” platforms come under the definition of an exchange.
Meanwhile in markets, ether hit its highest in 11 months after its latest software upgrade, known as Shapella, was completed. The move meant investors could access approximately $30 billion worth of tokens which had been deposited on the blockchain (aka the tokens they had “staked”), although there are some limits on how much ether users can redeem straightaway.
