Bittrex, Inc., Bittrex Global, GmbH, William Hiroaki Shihara

U.S SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 25817 / Aug. 29, 2023

Securities and Exchange Commission v. Bittrex Inc., Bittrex Global GmbH, and William Hiroaki Shihara, Civ. Action 2:23-cv-00580-RSM (W.D. Wash. filed April 17, 2023)

SEC Obtains Final Judgment against Bittrex, Inc. and Bittrex Global Gmbh

On August 15, 2023, the Securities and Exchange Commission obtained a final judgment against crypto asset trading platform Bittrex Inc. (“Bittrex”), its co-founder and former CEO, William Shihara (Shihara”), and Bittrex’s foreign affiliate, Bittrex Global GmbH (“Bittrex Global”).  The SEC previously charged Bittrex with operating as an unregistered national securities exchange, broker, and clearing agency, and charged Shihara as a control person for Bittrex’s violations.  The SEC also charged Bittrex Global for failing to register as a national securities exchange.

The SEC’s complaint, filed on April 17, 2023 in U.S. District Court for the Western District of Washington, alleged that Bittrex acted as an unregistered broker, exchange, and clearing agency by providing services to U.S. investors in connection with crypto assets that the SEC’s complaint alleged were offered and sold as securities. The complaint further alleged that Bittrex and Shihara directed issuers who sought to have their crypto assets made available for trading on Bittrex’s platform to first delete from public channels certain “problematic statements” that Shihara believed would lead a regulator, such as the SEC, to investigate whether the crypto asset was offered and sold as a security. Prior to the filing of the SEC’s complaint, Bittrex announced its intention to shut down its trading platform in the United States and, on May 8, 2023, filed for bankruptcy in the state of Delaware.

As part of the settlement, the defendants consented to entry of final judgments that permanently enjoin Bittrex and Shihara from violating Sections 5, 15(a), and 17A of the Securities Exchange Act of 1934 and enjoin Bittrex Global from violating Section 5 of the same Act. In addition, under the terms of the judgment, Bittrex and Bittrex Global will pay, on a joint and several basis, disgorgement of $14.4 million, prejudgment interest of $4 million, and a civil penalty of $5.6 million, for a total monetary payment of $24 million.

The SEC’s investigation was conducted by Daphna Waxman and Pamela Sawhney of the Division of Enforcement’s Crypto Assets and Cyber Unit, Ainsley Kerr of the Market Abuse Unit, and Jordan Baker, Neil Hendelman, and Lisa Knoop of the New York Regional Office. It was supervised by Mark R. Sylvester, Jorge Tenreiro, and David Hirsch of the Crypto Assets and Cyber Unit. The SEC’s litigation was conducted by Ben Kuruvilla, Michael Welsh, and Christopher Carney and supervised by Ladan Stewart and Olivia Choe. Litigation in the bankruptcy court is being handled by Therese Scheuer and Patricia Schrage and supervised by Alistaire Bambach.

• SEC Complaint