Bittrex argues that the SEC doesn’t have the jurisdiction to regulate cryptocurrencies.

The SEC additionally penalized Bittrex Global GmbH, a foreign subsidiary of Bittrex.

By submitting a motion to dismiss the complaint against it, Bittrex has advanced significantly in its legal struggle with the U.S. SEC. Bittrex argues in its new court filing that the SEC doesn’t have the jurisdiction to regulate cryptocurrencies as securities unless explicitly given that authority by Congress.

This argument takes issue with the Securities and Exchange Commission’s (SEC) present interpretation of securities laws and seeks to establish a more precise regulatory structure that is in line with the special characteristics of digital assets.

Bittrex and its co-founder William Shihara were charged with running an unregistered national securities exchange by the SEC in April. The lawsuit alleges that Bittrex, without being registered as an exchange with the SEC, allowed the trading of digital assets that qualified as securities under U.S. federal securities laws. 

For failing to register as a national securities exchange. The SEC additionally penalized Bittrex Global GmbH, a foreign subsidiary of Bittrex.

Following Coinbase’s Footsteps

Bittrex cited the challenging regulatory and economic climate in the U.S. as the reason for its decision to shut down after the SEC lawsuit. Bittrex, though, has promised to fight the SEC’s allegations instead of paying.

Bittrex’s request to dismiss borrows heavily from the strategy used by Coinbase, the more prominent cryptocurrency exchange. By following Coinbase, Bittrex seems to be making a calculated move to strengthen its joint defense against the SEC’s investigation.

Bittrex’s legal staff, like Coinbase’s, finds flaws in the SEC’s statements about the trading of investment contracts. While both defendants agree that initial sales of certain crypto assets may be considered securities contracts. They maintain that secondary market transactions involving the same assets should not be treated as securities.

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Filed under: Bitcoin - @ July 2, 2023 8:08 am