Crypto Trading Platform Settles Charges for Failing to Register
A trading platform and its CEO settled SEC charges for operating as a broker-dealer, an exchange and a clearing agency of crypto asset securities without registering with the SEC.
Before the U.S. District Court for the Western District Court of Washington Seattle Division, the SEC alleged that the trading platform operated as an unregistered (i) broker-dealer by soliciting investors, overseeing customer funds and assets, and collecting a fee for its services and (ii) clearing agency by holding customers' assets in a digital wallet and facilitating their transactions (see previous coverage).
To settle the charges, the trading platform and CEO agreed to:
- be permanently restrained and enjoined from further regulatory violations of Exchange Act Sections 5 ("Transactions on unregistered exchanges"), 15(a) ("Registration and regulation of brokers and dealers") and 17A(b) ("National system for clearance and settlement of securities transactions");
- pay disgorgement of $14,400,000 plus prejudgment interest of $4,000,000; and
- pay a civil money penalty of $5,600,000. The money is to be paid out of the plan of liquidation in the bankruptcy of Bitterer Inc.
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