‘We Never Got a Chance to Respond’: Bittrex CEO on SEC Wells Notice

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The CEO of Bit­trex Glob­al, Oliv­er Linch, sat down with Block­works to dis­cuss receiv­ing a Wells notice from the SEC and the shut­ter­ing of Bit­trex US. 

“We don’t know what the SEC is think­ing,” Linch said. 

He clar­i­fied that Bit­trex Glob­al and US are “entire­ly sep­a­rate com­pa­nies,” which is a clar­i­fi­ca­tion that Linch does not believe the SEC under­stands, as the SEC is pur­su­ing charges against both exchanges.

“The very, very first con­ver­sa­tion we had, the very base inter­ac­tion of any kind we had from the SEC was when they gave us the Wells notice,” Linch said. His team asked for time to respond to the Wells notice but were told “don’t bother.”

In April, Bit­trex was hit with mul­ti­ple charges by the SEC. The com­mis­sion alleges that six of the avail­able tokens on Bit­trex are secu­ri­ties because investors had a “rea­son­able expec­ta­tion of prof­its.”

The SEC also claimed that Bit­trex oper­at­ed as an “unreg­is­tered exchange, bro­ker and clear­ing agency.” 

Read more: Bit­trex Calls Out SEC‘s ‘Cru­sade’ Against Cryp­to Firms

“I’ve nev­er spo­ken to any­one at the SEC in any capac­i­ty,” Linch said. He not­ed that lawyers at Bit­trex were able to have con­ver­sa­tions with the SEC “final­ly” but the con­ver­sa­tions lacked “sub­stance” and did not allow the exchange the “oppor­tu­ni­ty to explain what was going on.”

Pri­or to the for­mal charges, Bit­trex US announced that it would shut down the US exchange on March 31.

“As a direct result of con­tin­ued reg­u­la­to­ry uncer­tain­ty and a lack of inter­est from U.S. reg­u­la­tors regard­ing sen­si­ble poli­cies that will fos­ter inno­va­tion and enhance the Amer­i­can econ­o­my, Bit­trex U.S. has made the dif­fi­cult deci­sion to wind down and will close its U.S. oper­a­tions,” CEO Richie Lai wrote in a state­ment. The exchange was closed on April 30. 

“As an indus­try, as a com­pa­ny, we’d much rather have clear rules that say what we can’t do than the uncer­tain­ty and the fog asso­ci­at­ed with sim­ply not know­ing what to do,” Linch said. 

“Ulti­mate­ly, that’s why I think the Bit­trex US deci­sion to close down in the US came because we only believe in doing the right thing and we, lit­er­al­ly, can’t because we don’t know what that means,” he continued. 

How­ev­er, SEC Chair Gary Gensler said that the “path to com­pli­ance is clear.”

“Blockchain is gen­uine­ly dis­rup­tive, and yet [the US is] try­ing to reg­u­late it accord­ing to prin­ci­ples that were set out near­ly 100 years ago. It’s not going to work, and it’s not work­ing, and there’s lessons to be learned on how to make it work,” Linch said.


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