The bankrupt cryptocurrency exchange, Bittrex has agreed to pay the Securities and Exchange Commission (SEC) a fine of USD $24 million. The settlement is related to allegations that the cryptocurrency exchange offered unregistered securities to investors in the US.

According to the regulator, Bittrex operated as a securities exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term, broker, and clearinghouse without being properly registered. Of the sum, Bittrex will pay the regulator USD $14.4 million constituting disgorgement, USD $4 million as prejudgment interest and USD $5.6 million in civil money penalties.

SEC's Allegations

The SEC's allegations extend further, claiming that Bittrex instructed crypto issuers to remove public statements that could potentially suggest their transactions might have violated the regulations. However, the exchange neither acknowledged nor refuted the claims in the settlement.

The terms of the settlement are reportedly subject to approval by the bankruptcy Bankruptcy Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co Read this Term court, considering Bittrex's recent bankruptcy filing. Thus, the exchange has a 90-day window to pay the fine. The failure to make this restitution could result in the regulator raising further charges against the company.

The SEC's Enforcement Director, Gurbir Grewal, said: "Today's settlement makes clear that you cannot escape liability by simply changing labels or altering descriptions because what matters is the economic realities of those offerings."

Bankruptcy Filing

Based in Seattle, Bittrex filed for bankruptcy in May following the SEC's allegations regarding its operations as an unregistered securities exchange. on April 30, the company terminated its activities in the US, clarifying that the bankruptcy filing will not affect its global operations offered through Bittrex Global, which caters to customers outside the US.

Amidst the bankruptcy, Bittrex said that it still holds cryptocurrency assets belonging to US customers who had not withdrawn their funds prior to April 30, according to a report by Reuters. Filed in a court in Wilmington, Delaware, Bittrex's bankruptcy filing shows that the company is holding between USD $500 million and USD $1 billion in both assets and liabilities.

Bittrex's case is not an isolated incident, as the SEC has targeted other major cryptocurrency exchanges, including Coinbase and Binance, with similar charges. In the past, the regulator has stated that cryptocurrencies are securities that must be brought under its purview.