Bittrex challenges SEC’s authority in crypto lawsuit, seeks dismissal

Bittrex Fights the SEC in Court

Bittrex, a crypto exchange, has taken a remarkable step in its legal battle with the Securities and Exchange Commission (SEC) of the United States by filing a motion to have the lawsuit against it dismissed.

In its recent legal document, Bittrex contests the SEC’s authority to classify cryptocurrencies as securities unless Congress explicitly grants them such power. This opposes the SEC’s comprehension of existing securities regulations and strives to create a more precise regulatory structure that takes into consideration the unique features of digital assets.

In its motion to dismiss, Bittrex has taken a similar stance to Coinbase, mirroring the arguments put forward by the larger crypto exchange. This shows that Bittrex is strategically taking advantage of the strong legal structure created by Coinbase in order to create a unified response to the SEC’s lawsuit.

Similar to Coinbase, Bittrex’s legal team has identified what they view as deficiencies in the SEC’s assertions regarding the trading of investment contracts. Both defendants agree that the original sale of some crypto assets could be labelled as securities contracts, however, they argue that this same designation does not apply to assets traded on secondary markets.

It is thus argued that once a particular asset is released and traded on secondary markets, it should no longer be viewed as a security, but rather should be categorized as a commodity or some other type of digital asset.

Bittrex further asserts that the SEC did not make it sufficiently clear that their activities were not allowed, which is a common tactic used by those in the crypto industry who dispute the SEC’s claims.

Bittrex withdrawals are able to be made again after the bankruptcy court gave its approval.

SEC Charges Against Bittrex and its Affiliates

In April, the SEC brought charges against Bittrex and its co-founder, William Shihara, for operating a national securities exchange without the proper registration. According to the complaint, Bittrex allowed for the trading of digital assets that met the standards of U.S. federal securities laws, but had not been registered as an exchange by the SEC.

Additionally, the SEC issued charges against Bittrex Global GmbH, the foreign affiliate of Bittrex, for failing to register as a national securities exchange.

SEC has a disdain for Metaverse.

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