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On April 17, 2023, the SEC sued Bittrex for acting as an unregistered securities exchange, broker-dealer, and clearing agency.1  Only a few weeks ago, the company announced it would exit the U.S. due to “continued regulatory uncertainty.” 

While asserting that, in order to prevail on its claims, it only has to establish that Bittrex listed a single security, the SEC provided what it called a “non-exhaustive list of crypto asset securities” available for trading on the exchange. The most prominent of the tokens identified was ALGO which, a keen observer might note, is traded also on Coinbase and Kraken. 


In the near term, it seems we have a few more years of regulatory uncertainty ahead. After all, it’s 28 months and counting since the SEC sued Ripple. Long term, let’s assume the SEC is able to convince a federal court that at least one of the tokens listed on Bittrex was a security. Same for Coinbase. Same for Kraken. Then what?

Maybe exchanges pay fines and continue operating, listing all the tokens the SEC (or private litigants) cannot or have not yet proven in court are securities. Maybe exchanges simply exit stage left, as Bittrex had already decided to do.

As we here at SKrypto have said before, upon learning that Coinbase had received a Wells notice, there has to be a better way. Of course, if the real goal is to drive everything crypto-related out of the United States, maybe there is no better way. Will the last cryptoexchange leaving the United States please turn out the lights?


1 The complaint also alleges control person liability against Bittrex co-founder William Hiroaki Shihara.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm or its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.


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Anthony Tu-Sekine | Partner

As the head of Seward & Kissel’s Blockchain and Cryptocurrency Group and a frequent commentator on all things crypto, Anthony advises clients on a wide range of evolving topics, including how to structure and issue security and utility tokens, registered and unregistered offerings of security tokens, token custody, transfer and liquidity issues, non-security opinions, and investments in crypto assets by funds and other investors. A recognized leader on physical precious metals funds, Anthony represented APMEX Inc. and alternative asset manager Sprott Inc. in connection with the launch of OneGold.com, which allows investors to own gold documented on blockchain. He also:

  • Represents ShelterZoom, a leading blockchain-based SaaS contract management platform;

  • Helped form a tokenized hedge fund;

  • Provides advice in connection with ransomware payments made in cryptocurrencies; and

  • Worked with sponsors of bitcoin ETF and OTC products.

“You can work with regulators or you can really try to piss them off… If you really want to do the latter, then you should expect that they will bring every tool they have against you.”

Anthony’s thoughts on BitMEX indictment, as published in Law360 article “BitMEX Case Seen as Blessing in Disguise for Crypto Sector”


Philip Moustakis | Partner

A former senior counsel in the SEC’s Division of Enforcement, Philip advises companies and individuals at Seward & Kissel on cryptocurrencies and blockchain technology, SEC enforcement matters, other regulatory investigations, and internal investigations. As a founding member of the SEC’s Cyber Unit, Philip advised the Commission on cryptocurrencies and investigated matters involving initial coin offerings (ICOs), unlawful touting of ICOs, and other violations of the federal securities laws related to cryptocurrencies. Publicly filed enforcement matters Philip spearheaded included the SEC’s first ever Bitcoin-related enforcement action against the operator of Bitcoin Savings & Trust, a Bitcoin-denominated Ponzi scheme, settled proceedings against an operator of a Bitcoin-related social media marketing venture and a popular Bitcoin betting site for the offer and sale of unregistered securities, and settled proceedings against an operator of unregistered cryptocurrency-denominated securities exchanges and broker-dealers.

“The SEC is a principles based regulator, and it will assert its jurisdiction over any securities offering or transaction, as it has done since the onset of the ICO craze, regardless of the technology used to facilitate such an offering.”

Philip’s thoughts on the recent SEC enforcement action against Kik Interactive, Inc. as published in the Crowdfund Insider article “Former SEC Senior Counsel Comments on Kik Ruling: Kik Could Have Benefited From Traditional Capital Markets Lawyer"