In brief
- Defunct exchange Bittrex is asking a federal judge to undo its 2023 settlement with the SEC.
- The company argues the SEC has since reversed its stance on crypto, undermining the original lawsuit.
- Now, Bittrex wants a federal judge to force the SEC to return the company’s $24 million settlement.
Crypto exchange Bittrex, which ceased operations after settling an SEC lawsuit under President Joe Biden’s administration, is now requesting the agreement be tossed in light of the regulator’s about-face on crypto.
In a new filing this week, attorneys representing the exchange asked a federal judge to vacate his prior judgment and compel the SEC to refund the $24 million Bittrex paid the regulator as a penalty back in 2023.
Under the Biden administration, the SEC sued Bittrex for offering the sale of crypto tokens it deemed to be illegally unregistered securities. The Seattle-based exchange ultimately settled, agreeing to pay $24 million in penalties. That agreement came a year after Bittrex agreed to pay the Treasury Department $29 million for “apparent violations” of sanctions against nations including Iran, Cuba, and Syria.
Shortly thereafter, Bittrex shut down, saying it was not “economically viable” to continue operating in the “current U.S. regulatory and economic environment.”
Since President Donald Trump’s return to power last year, however, the SEC has radically shifted its approach to crypto. The agency’s leadership has repeatedly emphasized that it does not view the vast majority of crypto tokens as securities, and has also dropped almost every lawsuit it had filed against crypto companies and exchanges.
Now, Bittrex’s attorneys are arguing it would only be fair for the former exchange to receive some benefits from the SEC’s change of heart.
“Two-and-a-half years after extracting a settlement from a bankrupt cryptocurrency exchange premised on the legal theory that the tokens that traded on the exchange were securities, the SEC has (a) conceded that its legal theory was wrong and those tokens were not securities, (b) acknowledged that its enforcement strategy was misguided from the start, and (c) dropped every similar case and investigation except this one,” Bittrex’s attorneys wrote in Monday’s motion to vacate.
The filing also states that, in March, the Trump SEC moved to forfeit Bittrex’s $24 million to the Treasury Department, to distribute to former customers who suffered financial harm.
The company’s attorneys are now urging the case’s judge to order the funds returned to Bittrex before the funds are disbursed.
An SEC spokesperson declined to comment on the case when reached by Decrypt.
