Bittrex, a cryptocurrency exchange, has taken a significant step in its legal battle against the US Securities and Exchange Commission (SEC) by filing a motion to dismiss the lawsuit filed against it. Bittrex argues that the SEC lacks the authority to regulate cryptocurrencies as securities without explicit authorization from Congress. This move aligns with Coinbase’s approach and aims to establish a clearer regulatory framework that considers the unique characteristics of digital assets.
Both Bittrex and Coinbase contest the SEC’s allegations concerning the trading of investment contracts. While they acknowledge that certain crypto assets sold initially may be classified as securities contracts, they argue that assets traded on secondary markets should no longer be considered securities but rather commodities or other digital asset classes.
Additionally, Bittrex claims that the SEC failed to adequately communicate that its actions were prohibited, employing a defense strategy commonly used by crypto defendants challenging the SEC’s allegations.
The SEC had filed allegations against Bittrex and its co-founder for running an unregistered national securities exchange. The complaint stated that Bittrex facilitated the trading of digital assets that met the criteria of securities under US federal securities laws without obtaining proper SEC registration.