SEC claims Algorand, Dash, and OMG Network are securities

• The US Securities and Exchange Commission charges Bittrex for failing to register as a national securities exchange.

• Cryptos including Dash, Algorand, OmiseGO, etc have been classified as securities.

The US Securities and Exchange Commission (SEC) strikes again as it drags crypto exchange Bittrex and former CEO William Shihara to court. According to the SEC, the exchange operated as an unregistered national securities exchange, broker, and clearing agency.

Within the complaint, the Agency stated that the exchange facilitated the selling and buying of cryptos including OmiseGO (OMG), Dash (DASH), Algorand (ALGO), TokenCard (TKN), NAGA Coin (NGC), and i-House Token (IHT). While there is nothing wrong with providing services for cryptos, SEC claims all the listed assets are securities, meaning Bittrex ignored clear indications that some assets were marketed, offered, and sold as securities. 

More allegations by SEC

Shihara has been accused of instructing the teams behind these cryptos to take down problematic statements made in the past that could draw the attention of the SEC. Before assets could be listed on the exchange, price predictions, expectations of profit, and other investment-related terms were deleted. 

The exchange has also been accused of failing to provide restrictions on crypto asset purchases to any particular investor type. In addition, Bittrex allegedly failed to make it a requirement for investors to purchase quantities tied to any non-investment use of the asset. 

SEC Chair Gary Gensler commented: 

Today’s action, yet again, makes plain that the crypto markets suffer from a lack of regulatory compliance, not a lack of regulatory clarity. As alleged in our complaint, Bittrex and issuers that it worked with knew the rules that applied to them but went to great lengths to evade them by directing issuer-applicants to ‘scrub‘ offering materials of information indicating that certain crypto assets were securities.

SEC believes that Bittrex put investors at significant risk while raking in $1.3 billion in revenues from transaction fees. SEC is also suing Bittrex’s foreign affiliate, Bittrex Global for not registering as a national securities exchange.

Bittrex Global’s response to the Allegation

On April 17, Bittrex Global issued a response to the civil proceedings initiated by SEC. According to Bittrex, the exchange has no US customers and does not do business in the US, or with any US persons. The exchange also claims that it has informed all US persons that they are not permitted to use the exchange.

It is important to note that Bittrex U.S. operated in the country until it stopped operations in March 2023 over regulatory uncertainties. The company clarifies that the affiliate was and is legally and operationally distinct from Bittrex Global. 

The company further disclosed that SEC issued a Wells Notice less than a month ago without any prior contact with Bittrex Global. In addition, the Agency has never requested any information or documentation at any stage.

The statement also discloses that SEC has shown no interest in any discussion with the company to understand its position. For this reason, Bittrex Global would make these explanations in court to defend these allegations in the US.

Bittrex Global was founded upon principles of security and compliance — and we take great pride in our global reputation as one of the longest-standing and most compliant exchanges in the world. Our highest priority continues to be our customers and adherence to our legal and regulatory obligations…All Bittrex Global customer funds continue to be safe and accessible, and we remain committed to providing our customers with the safest, most secure, and most compliant exchange in the market.

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It is currently unknown whether the price of these cryptos could be massively impacted by this lawsuit. 

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