The U.S. Securities and Exchange Commission (SEC) has charged crypto exchange Bittrex and its co-founder Bill Shihara for failing to register as a national securities exchange.

The SEC pointed out that the exchange’s foreign affiliate, Bittrex Global GmbH, was also charged because it has a single shared order book with the U.S.-based company.

In an April 17 statement, the financial regulator alleged that Bittrex earned over $1.3 billion in revenues from U.S. investors while servicing them as a broker, exchange, and clearing agency without registering with the authorities.

According to the SEC, Bittrex and Shihara coordinated with crypto assets issuers to delete “problematic statements” that could cause regulators to investigate the crypto asset as a security offering.

“Bittrex and Shihara instructed issuer-applicants to delete statements related to ‘price prediction[s],’ ‘expectation of profit,’ and other ‘investment-related terms.’”

The SEC complaints further alleged that Bittrex should “have registered as a clearing agency because it acted as an intermediary in making payments and deliveries upon matching sell and buy orders and maintained custody of customer assets.”

SEC chair Gary Gensler said:

“Bittrex and issuers that it worked with knew the rules that applied to them but went to great lengths to evade them by directing issuer-applicants to ‘scrub‘ offering materials of information indicating that certain crypto assets were securities. Further, Bittrex, as alleged, failed to register and comply with U.S. securities laws as an exchange, broker-dealer, and clearing agency. Cosmetic alterations did nothing to change the underlying economic realities of the offerings and Bittrex’s conduct.”

Meanwhile, a March 31 statement from Bittrex’showed it was suspending its U.S. operations by April 30. The crypto firm blamed the decision” on the “continued regulatory uncertainty” in the country.”

Since 2020, the exchange’s trading volume has declined to $12 million daily, from nearly half a billion, according to Kaiko data.

Bittrex is the second crypto exchange the financial regulator would file charges against in the last three weeks. The SEC has recently increased its regulatory scrutiny of the crypto space, filing charges against crypto entrepreneur Justin Sun and several others.

The post SEC file charges against Bittrex, former CEO for operating without license appeared first on CryptoSlate.