Bittrex Global CEO Oliver Linch recently spoke with Blockworks to provide insight into the Wells notice sent to Bittrex from the U.S. Securities and Exchange Commission (SEC). The well-known crypto exchange was also issued several charges by the SEC in April, while the U.S. branch of the company shut down operations in March.

The SEC took actions against both the Bittrex Global and U.S. exchanges, which surprised Linch because the two exchanges are entirely separate entities. Furthermore, Linch revealed that the very first conversation Bittrex had with the SEC was the Wells notice itself and even then, the team was told not to bother responding.

The SEC alleged that Bittrex operated as an “unregistered exchange, broker, and clearing agency” and that six of the tokens listed on the exchange are security tokens, as investors had a “reasonable expectation of profits.” Linch mentioned that the SEC did eventually hear out Bittrex's lawyers but the discussion lacked substance and did not actually allow the exchange to explain the situation. Because of the state of regulatory uncertainty and a lack of interest from U.S. regulators in fostering innovation, the Bittrex team ultimately decided to wind down and close the U.S. branch on April 30.

SEC Chair Gary Gensler declared that the “path to compliance is clear,” but Linch argued that the SEC is trying to regulate blockchain, which is a disruptive technology, according to principles established almost a century ago. This, he says, will not work and lessons should be learned on how to make it effective.

Overall, it is clear that with the SEC taking many actions against Bittrex, and Linch not believing that the SEC understands the distinguishing between Bittrex Global and U.S., the situation is quite complex. What remains to be seen is what the SEC's ultimate decision will be and whether Bittrex's stance will hold true.



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