The Securities and Exchange Commission and Bittrex agreed to a $24 million settlement on Thursday after the SEC sued the crypto firm in April for allegedly operating as an unregistered exchange, broker, and clearing agency.
“We are delighted to have reached a settlement agreement with the SEC so quickly following the submission of our motion to dismiss,” a Bittrex spokesperson said in a statement when contacted by Fortune. “The agreement has now been submitted to the court for approval, and we will be able to comment further once that process is complete.”
As part of the agreement, Bittrex does not admit to or deny any of the SEC’s allegations. The agency will suspend litigation against the exchange and cofounder and former CEO William Shihara unless Bittrex fails to fork over the $24 million—composed of $14.4 million in allegedly undeserved profits, $4 million in interest on said profits, and a $5.6 million penalty—before March 1, 2024.
“For years, Bittrex worked with token issuers to ‘scrub’ their online statements of any indicia that they were investment contracts—all in an effort to evade the federal securities laws,” Gurbir S. Grewal, director of the SEC’s division of enforcement, said in a statement. “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.”
The settlement comes amid a larger campaign from the federal agency against the crypto industry since the sudden collapse of FTX in November. In January, the SEC sued Gemini and Genesis for allegedly selling an unregistered security through their yield-bearing product Gemini Earn, after which the agency agreed to a $30 million settlement with U.S.-based exchange Kraken over its staking product, which the SEC alleged was, yet again, akin to selling an unregistered security.
After suing crypto celebrities Justin Sun and Do Kwon, SEC Chair Gary Gensler turned his attention to Bittrex in April, which prompted the exchange to cease operations in the U.S. on April 30, and then, a bit more than two weeks later, declare bankruptcy for its U.S. subsidiary. “We allege that Bittrex repeatedly chose profits over investor protection,” SEC enforcement director Grewal said in a statement accompanying the agency’s lawsuit.
And most recently, its suite of crypto litigation reached a crescendo in June when the SEC sued Binance, the world’s largest crypto exchange, and then Coinbase, the largest based in the U.S.