US SEC Charges Bittrex With Operating Unregistered Securities Exchange

The U.S. Securities and Exchange Commission on Monday charged cryptocurrency exchange Bittrex and its former CEO William Shihara with operating an unregistered national securities exchange, broker and clearing agency. From a report: The SEC alleged in its complaint, which was filed in a U.S. district court in Washington, that Shihara coordinated with crypto asset issuers seeking to make their tokens available for trading on Bittrex's platform to delete public statements that Shihara believed would lead regulators to investigate those token offerings as securities. The SEC also charged Bittrex's foreign affiliate, Bittrex Global GmbH, for failing to register as a national securities exchange in connection with its operation of a single shared order book along with Bittrex. Seattle-based Bittrex had previously announced it would shutter its U.S. operations effective April 30 due to "continued regulatory uncertainty." The company's non-U.S. operations are based in Liechtenstein.

"DeFi" = "Deregulated Finance"

[Anonymous Coward]

The plan for all cryptocurrencies isn't what they want to make you think it is. It's more sinister than the egalitarian image the crypto boys portray for it.

After the 2008 financial meltdown, cryptocurrencies were born out of it, declared to be the means by which people could be freed from banks/governments, and promised to avoid any such future meltdowns from happening ever again.

But the crypto boys watched closely the result of that meltdown, and formulated their plan: create a new form of currency, and for it a new financial system detached from traditional ones (those burdened by "governments and regulations") - they called it "DeFi" for "Decentralized Finance", but its dirty little secret is that it's really "Deregulated Finance".

Their plan is to make this new money be adopted by the masses, so they start it off with a low price, then gradually increase it, by virtue of them just pulling numbers out of thin air for its value, until it catches the attention of the masses - then it gets more and more "valuable" from the collective faith of its given value ("network effect"), until traditional institutions and the typical "1%" billionaires start to notice and, greedy as they are, want in on the action too.

So now those that got in at the ground floor have gained all this "value" out of thin air, and once they're ready, they'll pull out all pretty much at once - that it'll create a sell-off panic, and a new meltdown is born! And because of their "De[regulated]Fi" system, the bros have already shifted all the risks away from themselves onto others, so they'll make out like bandits, leaving everyone else to "hodl" the bag.

But the bros were really observant about that last meltdown - and noticed all the "bailouts" the big banks got - so as they were shifting the risks to others, they increased their investments into what would get the next bailouts - so in the end they'll make out like bandits twice: the first time from suckering everyone else into their pump-and-dump scam, and again once they benefit from the bailouts that'll get handed out.

And there you have it folks, the real master plan of crypto.

--
"Those who fail to accept it will mod the truth down to -1." -Prof. Feynman

Re: "DeFi" = "Deregulated Finance"

[vxir]

Let me destroy your entire argument in 1 sentence: Unlike fiat, if you don't want to use it, don't.

Without fiat to give it value....

[Anonymous Coward]

Did you ever notice how the bitcoin/crypto bros are always boasting about the price of it while trashing fiat currencies? And how they always use a fiat value to compare its price with?

Without fiat to give it value, their precious crypto/bitcoin is worthless.

Re:

[Noven]

Did you ever notice how the bitcoin/crypto bros are always boasting about the price of it while trashing fiat currencies? And how they always use a fiat value to compare its price with?

Without fiat to give it value, their precious crypto/bitcoin is worthless.

Also how much it costs to just use it.

They're going after small fish first

[rsilvergun]

ones that don't have the resources to phone up a Senator and get an investigation quashed. That way they can build up procedures and precedence for the bigger exchanges. e.g. Coinbase & Binance.

I say good. Unregulated securities are bad juju. The last thing anyone wants is banks bunding these things into "safe" securities because they "spread the risk out among 100 crapcoins" and then selling those securities to your 401k and your grandma's pensions. Laws around 401ks have changed (happened around 2017) so that they can do riskier investments than they used to.

Re:

[ttspttsp]

Laws around 401ks have changed (happened around 2017) so that they can do riskier investments than they used to.

Which law(s) are you referring to?

There's several

[rsilvergun]

but I believe these [forbes.com] are a good start. Also this [theintercept.com]. And the SECURE act.

Lots of nasty little changes happened to 401ks from 2016-2020.

Re:

[TechyImmigrant]

Laws around 401ks have changed (happened around 2017) so that they can do riskier investments than they used to.

Which law(s) are you referring to?

My company provided 401k only lets me trade in funds and ETFs, not individual stocks. But it doesn't stop me investing in a triple leveraged short ETF (E.G. LABD, or SOXL) which lets you get back the volatility you need to make money.

As usual, you're full of shit on crypto

[DeplorableCodeMonkey]

The SEC is going after them because they did actual securities trading [bittrex.com] in real stocks via tokenized securities without complying with brokerage licensing requirements. This has nothing to do with basic crypto and everything to do with something the SEC has black letter of the law authority to pursue.

There is a company that does this legally: Uphold. You can buy and trade stocks or crypto on the same platform. Also, Fidelity does it now too. You know what they both do? Comply with brokerage licensing require

Re:

[ttspttsp]

Thanks for making this point.

I don't think this really much difference

[rsilvergun]

I could be misunderstanding this but "tokenized stocks" appears to be nothing more than a cryptocurrency whose value is pegged to a specific stock on a given stock exchange. Where they peg the value doesn't really seem to matter. The only difference is that instead of the value of your cryptocurrency being pegged to a fiat currency you use to buy it it's peg to a stock. But at the end of the day the asset being traded is still a cryptocurrency not a stock. It's basically a "stable coin" where instead of mo

Re:

[DarkOx]

Its different the notional currencies like bitcoin; but I'll agree its similar in concept to a stable coin - which also IMHO if we were smart would be banned.

The problem is at the end of the day the asset being traded is not the stock but rather tokens supposedly tied to the stock but on much shakier contractual footing. If anything its more like options trading than stock trading. The token represents some contract to exchange for X number of shares of the underlying asset. Except unlike options trading wh

Re:

[Anonymous Coward]

Kraken next?

Seriously doubt Coinbase is going to get in much trouble. They have been bankrolling massive efforts to get the US to figure out WTF the rules are. Which continues to be a huge problem. The government can't make up its mind. The rules are arbitrary and random depending on which branch needs to steal some quick cash.

Of course Binance will collapse at some point. It's Mt Gox/FTX all over again. Very shady stuff going on through a "non-Chinese" exchange that in reality is very likely actually Chin

I have no particular desire to be ripped off, but

[John.Banister]

The pace of their shutting down every way that any dollars can be converted to & from any cryptocurrency is giving me the feel of institutions that have performed regulatory capture saying to their captive regulators "Quash this for us, would you." Maybe this is just a small corner of all kinds of other consumer protection the SEC is doing, but I've got a feeling that when the familiar names end back up the familiar creek, the SEC will once again be saying "*US????* Why are you looking at us?"

Bittrex

[TwistedGreen]

Bittrex, isn't that the bitter-tasting additive they add to cleaning products so kids don't drink them?

What a great name for a scam company!