Crypto Exchange Bittrex Seeks Dismissal of SEC Lawsuit, Citing Lack of Congressional Authorization

News | July 3, 2023 By:

Cryptocurrency exchange Bittrex s pushing back against a lawsuit brought by the U.S. Securities and Exchange Commission (SEC). The exchange is challenging the authority of the SEC and seeking a dismissal of the case.

In April of this year, the SEC filed a lawsuit against Bittrex, alleging that the exchange facilitated the trading of unregistered securities. According to the SEC, Bittrex allowed the trading of digital assets that should have been classified as securities under U.S. law. The regulatory body argues that Bittrex’s actions violated federal securities laws and is seeking penalties and disgorgement of profits.

In a motion filed on June 30, 2023, Bittrex contested the SEC’s authority to regulate cryptocurrencies. The exchange argues that the SEC lacks proper congressional authorization to regulate the industry. Bittrex contends that without explicit legislative approval, the SEC’s actions may be overstepping its bounds.

By challenging the SEC’s authority, Bittrex is aiming to set a precedent that could have far-reaching implications for the entire cryptocurrency landscape. The outcome of this legal battle could shape the regulatory framework for digital assets in the United States.

Bittrex’s defense hinges on the argument that cryptocurrencies are a unique asset class and should not be subject to the same regulatory oversight as traditional securities. The exchange asserts that digital assets have distinct characteristics that require a tailored regulatory approach. Bittrex claims that the SEC’s attempt to apply existing securities laws to cryptocurrencies is misguided and inappropriate.

The exchange points out that Congress has not specifically granted the SEC the authority to regulate cryptocurrencies. Bittrex believes that any regulations imposed on the industry should be established through proper legislative channels, rather than through the SEC’s interpretation of existing laws.

Bittrex’s decision to challenge the SEC’s authority in the lawsuit highlights the ongoing debate about the appropriate regulatory framework for cryptocurrencies. The outcome of this case could shape the future of the cryptocurrency industry in the United States and potentially pave the way for more tailored and industry-friendly regulations.

A copy of the original filing can be found here.