The crypto exchange Bittrex has been in deep trouble for listing unregistered securities on their platform while knowing how it would negatively impact their customers. So, when the SEC filed a complaint against the platform, it was revealed that Bittrex founder ridiculed its customers in their internal communications, telling them to “go fu*k themselves.” The exchange also said that they never offered any services as such in the United States.
Complaint filed against Bittrex
The Securities and Exchange Commission said that despite knowing that they were breaking laws by listing unregistered securities, the Bittrex founder went ahead with it. And this is not just a claim made out of thin air, as the SEC claims to have messages to prove their point. SEC also reported that the exchange tried to cover up what they did by delisting tokens and also scrubbing away marketing of unregistered securities that they did before. All this was found by the SEC through internal messages of the company.
The authorities also claim to have a source (a Bittrex employee) who was not identified in their report who shared how one of the founders has been insensitive about what happens with the customers. He allegedly said, “I hate people bitching that we don’t email them about market removals.” And his response to them was, “Go f*** yourself. Track your own damn investment or get a broker to do it for you.”
Leaked emails and cheat sheets
The SEC also reported that Bittrex’s founder has been doing things like this for a long time now. He allegedly was involved in the ICO bubble of 2017 and asked multiple projects to remove any sort of investment phrases from their marketing efforts to avoid regulatory scrutiny. An email was also shared by the SEC regarding the same citing a crowd sale of a coin called ‘TKN.”
It is clear from this mail that they had an idea that TKN might be a security, but they still chose to ignore it. The worst part of all this was their planned approach to fool their customers into buying unregistered securities while also evading the authorities by exploiting loopholes. The company even had a cheat sheet. The sheet pointed out 3 problematic features and 3 problematic statements that they wanted to avoid.
The problematic features were:
- Tokens that provided passive income
- Tokens that are used for advertising illegal activities like gambling
- Tokens that violated money transmission laws
The problematic statements were:
- Price predictions
- Tokens that were marketed as if they would offer ownership
- Rewards received by investors portrayed as interest
It is reported by the SEC that Bittrex is still operating in the United States but will shut down its operations completely by the end of April.
Bittrex is openly scamming its customers
Just like FTX, even the crypto exchange Bittrex had very crooked terms and conditions for their customers. First of all, they had no obligation whatsoever to keep customer deposits separate from their digital assets. So, they can basically do whatever they want with customer deposits, and users cannot do anything about it. For all the laws they have violated and for not complying with anti-money laundering laws and sanctions, Bittrex has been asked by the SEC to pay $53 million in fines to the US Treasury Department, and they have agreed to pay the same.
What are your thoughts as the Bittrex founder ridiculed its customers in their internal communications? And do you think that the Securities and Exchnage Commission did a good job here? Let us know in the comments below. And if you found our content informative, share it with your family and friends.
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