Bittrex Seeks Dismissal In Crypto Lawsuit As It Challenges US SEC’s Authority In the Lawsuit

Bittrex, a prominent crypto exchange, has filed a motion to discharge the lawsuit submitted by the US Securities and Exchange Commission (SEC) against it. In the platform’s recent court filing, it has argued that the securities regulator does not possess the power to regulate crypto assets as securities since Congress has not given it the respective authority.

Bittrex Stands against SEC, Challenging Its Power to Administer Crypto Securities

The respective claim challenges the securities regulator’s interpretation of the present securities regulations. It also attempts to make an additional clear regulator agenda to accommodate digital assets. In the motion filed by Bittrex, the company has adopted an approach analogous to Coinbase. The arguments made by the platform are just like those provided by the bigger crypto firm.

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The similarity suggests a strategic development by Bittrex for capitalizing on the strong legal agenda made by the crypto exchange Coinbase. It also establishes a combined defense confronting the lawsuit filed by the SEC. Similar to Coinbase, the legal team of Bittrex indicates what is perceived by it as the weaknesses in the allegations raised by the securities regulatory agency in terms of the investment contracts’ trading.

Though both the defending companies recognize that the early sale of particular cryptocurrencies could be categorized among the securities contracts, they oppose that the similar categorization does not broaden to assets that are traded with the help of the secondary markets. The team is of the view that, after the launch and active trading of an asset on secondary markets, the respective token should not be identified as a security.

On the other hand, they added, it would be classified among commodities or some other classes of digital assets. In addition to this, the crypto exchange also opposes by saying that the regulator did not carry out any adequate communication suggesting that the actions done by the firm were banned. This emphasizes a defense strategy that is normally utilized by the defendants who stand against the allegations raised by the SEC.

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This year, the US securities regulator has frequently been taking action against crypto entities. Keeping this in view, the crypto platforms have been quite apprehensive. The top crypto exchanges Coinbase and Binance are also categorized among the firms targeted by the SEC. Moreover, in April this year, the securities regulatory agency raised allegations against Bittrex as well as the company’s co-founder named William Shihara.

The US Securities Regulator Says Bittrex Offered Securities Trading Without Any Registration

As per the SEC, the defendants allegedly operated an unlicensed securities exchange on the national level. In its complaint, the regulator asserted that the crypto exchange facilitated digital asset trading in line with the criteria specified by the country’s federal securities laws for digital assets. Nonetheless, the SEC claimed that Bittrex enabled this trading without seeking registration to operate as an exchange.