Bittrex has closely aligned its arguments with those put forth by Coinbase in the ongoing legal battle. Both exchanges share similar viewpoints and are presenting unified arguments to challenge the regulatory authority of the SEC.
Bittrex, a cryptocurrency exchange, has filed a motion to dismiss in its legal dispute with the U.S. Securities and Exchange Commission (SEC). The exchange is seeking to have the case against it dismissed, presenting its arguments to challenge the SEC’s claims.
In a recent court filing, Bittrex asserts that the SEC lacks the authority to regulate cryptocurrencies as securities unless specifically granted by Congress. This argument directly challenges the SEC’s interpretation of current securities regulations and aims to establish a clearer regulatory framework that accommodates digital assets. Bittrex is seeking to shape the legal landscape surrounding cryptocurrencies through this assertion.
Bittrex, in its motion to dismiss, has taken a similar approach to Coinbase by closely aligning its arguments with those of the larger cryptocurrency exchange. This strategic alignment signifies Bittrex’s intention to leverage the established legal framework put forth by Coinbase and build a unified defense against the SEC’s lawsuit. By adopting a similar stance, Bittrex aims to strengthen its position and maximize the chances of a favorable outcome in the legal proceedings.
Bittrex’s motion to dismiss (screenshot). Source: CourtListener
Bittrex’s legal team, similar to Coinbase, has identified what they consider as deficiencies in the SEC’s allegations concerning the trading of investment contracts. Both defendants acknowledge that the initial sale of specific crypto assets could be classified as securities contracts. However, they argue that this classification should not be extended to assets traded on secondary markets. Bittrex maintains that the distinction between primary and secondary market transactions is crucial in determining the applicability of securities regulations.
Bittrex’s argument asserts that once an asset is launched and actively traded on secondary markets, it should no longer be regarded as a security. Instead, they advocate categorizing it as a commodity or another classification of digital asset. According to Bittrex, the nature of an asset evolves as it enters the secondary market, warranting a distinct regulatory treatment beyond the scope of securities regulations.
In addition, Bittrex argues that the SEC failed to sufficiently communicate that its actions were prohibited, employing a defense strategy commonly used by cryptocurrency defendants when challenging the SEC’s allegations. Bittrex asserts that clear guidelines and communication from the SEC are necessary to establish a fair regulatory environment, especially considering the evolving nature of the crypto industry.
In April, Bittrex and its co-founder, William Shihara, were charged by the SEC for operating an unregistered national securities exchange. The complaint stated that Bittrex facilitated the trading of digital assets that met the criteria for securities under U.S. federal securities laws, without obtaining proper registration from the SEC as an exchange.
The SEC’s complaint against Bittrex also included charges against Bittrex Global, the foreign affiliate of Bittrex, for failing to register as a national securities exchange. According to the SEC, Bittrex Global operated as an exchange without obtaining the necessary registration, thereby violating securities exchange regulations.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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