David Schwartz, Ripple’s Chief Technology Officer and known as @JoelKatz on Twitter, has weighed in on the U.S. SEC’s recent action against Bittrex, a prominent crypto exchange. The SEC’s legal complaint identifies DASH, ALGO, OMG, IHT, NGC, and TKN as securities listed on Bittrex. Schwartz referred to the SEC document, which states that investors in these tokens “have a reasonable expectation of a profit,” and jokingly labeled it as “investment advice.”
Bittrex is shutting down all of its operations in the USA due to continued scrutiny from local regulators. The exchange’s management team tweeted that regulators are not interested in providing reasonable rules to help innovative technologies adapt and enhance the U.S. economy’s prosperity. Bittrex will stop serving U.S. customers by the end of April, and users can withdraw their funds and transfer them to cold wallets or other exchanges. Bittrex’s CEO, Richie Lai, expressed his sadness over the company’s difficult decision and announced that the former U.S. Bittrex team will now concentrate on assisting Bittrex Global succeed in other parts of the world.
The U.S. regulator filed charges against Bittrex and its former CEO, William Shihara, on April 17, alleging that they operated an unregistered digital exchange. The regulator believes that Bittrex has offered its customers the opportunity to trade and invest in unregistered securities since 2014. The SEC also claimed that Shihara and the platform had arrangements with token issuers to list them on Bittrex and removed “problematic statements” from social media and other public channels for this reason. These statements related to investment terms such as “price predictions” and “expectations of profit,” and the SEC included the aforementioned tokens. Gurbir S. Grewal, the head of the SEC’s Division of Enforcement, stated that Bittrex prioritized profits over investor protection.