Bittrex vs. The SEC Legal Battle May Be Dismissed Soon

Cryptocurrency pioneer Bittrex has filed a dismissal plea in the ongoing legal altercation with the United States Securities and Exchange Commission (SEC), sparking a fresh discourse on digital asset regulation’s ambiguities.

Aligning Arguments with Coinbase: A Strategic Defence by Bittrex

In a recent court submission, Bittrex postulates that the SEC lacks the jurisdiction to govern cryptocurrencies as securities, unless Congress provides an explicit mandate. This daring declaration challenges the SEC’s current interpretation of securities regulations. It also seeks to shape a more clear-cut regulatory framework better adapted to accommodate the ever-evolving realm of digital assets.

In a quest to dismiss the SEC’s allegations, Bittrex mirrors the defense strategy employed by Coinbase, its more sizeable counterpart in the cryptocurrency market. This synchronization of legal arguments signifies a strategic decision by Bittrex. It capitalizes on the comprehensive legal structure established by Coinbase to form a consolidated defense against the SEC’s lawsuit.

Challenging the SEC’s Standpoint on Digital Asset Classification

Like Coinbase, Bittrex’s legal counsel draws attention to what they perceive as the flaws in the SEC’s assertions about trading investment contracts. Both defendants concur that some crypto assets’ initial sale could be considered securities contracts. However, they assert that this classification does not apply to assets traded on secondary markets.

Bittrex argues that once a digital asset is launched and subsequently traded on secondary markets, it should cease to be classified as a security. Instead, it should be reclassified as a commodity or a different digital asset category altogether.

Further, Bittrex maintains that the SEC failed to convey that their actions violated the law adequately. That highlights a recurring defense strategy deployed by cryptocurrency defendants contesting the SEC’s allegations.

SEC Charges Against Bittrex and Its Co-Founder

In April, the SEC initiated charges against Bittrex and its co-founder, William Shihara, accusing them of operating an unregistered national securities exchange. According to the allegations, Bittrex facilitated the trading of digital assets that met the securities criteria as stipulated in U.S. federal securities laws. All of this without securing the necessary SEC registration as an exchange.

Similarly, the SEC has also indicted Bittrex Global, a foreign subsidiary of Bittrex, for not registering as a national securities exchange.

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