Bankrupt crypto trading platform Bittrex, which ceased U.S. operations earlier this year, will pay $24 million to settle U.S. Securities and Exchange Commission (SEC) charges for running an unlicensed exchange, broker, and clearing agency.

What's The Deal That Bittrex Agreed To?

Bittrex and Bittrex Global will pay $14.4 million in disgorgement, $4 million in prejudgment interest, and $5.6 million in civil penalties to resolve the legal dispute with the U.S. regulator. The settlement is pending court approval. Bittrex Global represents the international arm of the Bittrex brand.

Bittrex and its co-founder and ex-CEO William Shihara settled without admitting or denying the SEC's allegations. The SEC originally alleged in April Bittrex and Shihara operated an unregistered national securities exchange, broker, and clearing agency since 2014.

The regulator also accused Bittrex of working with token issuers to "scrub" their online statements of any signs they were investment contracts in order to evade federal securities laws.

SEC enforcement director Gurbir Grewal said the settlement shows "you cannot escape liability by simply changing labels or altering descriptions because what matters is the economic realities of those offerings."

Shihara, who left Bittrex in 2019, said in a statement that the settlement was a "good outcome," and a Bittrex spokesperson said the firm was "delighted" with the outcome of the case, Reuters reported.

Bittrex faced other enforcement actions from the U.S. Department of the Treasury in October 2022, resulting in a $24 million and a $29 million settlement. The exchange announced in March it would close its operations in the U.S. because of the regulatory environment and filed for Chapter 11 bankruptcy in May.

SEC's Aggressive Crypto Crackdown Likely To Continue

This year has been critical for the crypto industry when it comes to enforcement actions taken by the SEC. In addition to Bittrex, crypto exchanges Binance, Coinbase, and Kraken have also faced charges from the financial regulator.

Additionally, the SEC plans to appeal the decision in their case against Ripple Labs where a federal judge ruled that XRP is not a security. More recently, crypto promoter Richard Heart was charged by the SEC for activities related to his HEX crypto token.

Despite all of these regulatory actions, bitcoin is currently up roughly 78% since the start of the year.