Bittrex Challenges SEC’s Authority in Legal Dispute

Cryptocurrency trader Bittrex has filed a motion to dismiss its legal dispute with the Securities and Exchange Commission (SEC) of the United States.

Bittrex contends in a recent court filing that the SEC lacks the authority to regulate cryptocurrencies as securities unless granted explicitly by Congress.

This argument challenges the SEC’s interpretation of existing securities regulations and endeavors to establish a more clearly defined regulatory framework for digital assets.

Bittrex has employed a similar strategy to Coinbase in its motion to dismiss, closely aligning its arguments with those of the more prominent cryptocurrency exchange.

This indicates a strategic move by Bittrex to capitalize on Coinbase’s comprehensive legal framework and construct a unified defense against the SEC’s lawsuit.

Bittrex’s legal team, like Coinbase’s, identifies what they perceive to be flaws in the SEC’s allegations regarding the trading of investment contracts.

While both defendants recognize that the initial sale of specific crypto assets could be classified as securities contracts, they argue that the same classification does not apply to assets traded on secondary markets.

They argue that once an asset is published and actively traded on secondary markets, it should no longer be classified as a security but as a commodity or another digital asset.

In addition, Bittrex asserts that the SEC did not adequately convey that its actions were prohibited, emphasizing a common defense strategy employed by crypto defendants who contest the SEC’s allegations.

The SEC filed charges against Bittrex and its co-founder, William Shihara, in April for operating an unregistered national securities exchange.

According to the complaint, Bittrex permitted the trading of digital assets that met the criteria for securities enumerated in U.S. federal securities laws without registering as an exchange with the SEC.

Bittrex Global, the foreign subsidiary of Bittrex, was also accused in the same complaint of failing to register as a national securities exchange.