Cryptocurrency exchange Bittrex has taken a strong position in its legal battle with the United States Securities and Exchange Commission (SEC) by filing a motion to dismiss the lawsuit. Bittrex’s argument revolves around questioning the SEC’s authority to regulate cryptocurrencies as securities without explicit approval from Congress. This aligns with Coinbase’s strategy, as Bittrex aims to build a united defense against the SEC, leveraging the legal framework established by its larger counterpart.
Similar to Coinbase, Bittrex’s legal team challenges the SEC’s allegations regarding the trading of investment contracts. While they acknowledge that certain crypto assets may be considered securities during their initial sale, they argue that such classification should not extend to assets traded on secondary markets. Bittrex contends that once an asset is actively traded on secondary markets, it should be classified as a commodity or another form of digital asset, rather than a security.
Furthermore, Bittrex claims that the SEC failed to adequately communicate that its actions were prohibited, echoing a defense strategy commonly employed by cryptocurrency defendants challenging the SEC’s allegations.
The complaint against Bittrex highlights the allegation that the exchange facilitated the trading of digital assets that met the criteria outlined in U.S. federal securities laws without obtaining the necessary SEC registration as an exchange. Additionally, the SEC charged Bittrex Global, the foreign affiliate of Bittrex, with failing to register as a national securities exchange.
By submitting the motion to dismiss, Bittrex aims to establish a more defined regulatory framework that accommodates digital assets. The outcome of this legal dispute could have significant implications for the regulation of cryptocurrencies and the broader cryptocurrency industry.
The unified defense strategy employed by both Bittrex and Coinbase signifies a growing determination within the cryptocurrency community to challenge the SEC’s interpretation of existing securities regulations and seek clarity in the evolving landscape of digital assets.
Compiled by Coinbold
