Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

Paradigm Counsel Criticizes SEC’s Overreach in Bittrex Case, Questions Authority over Crypto Secondary Markets

In a recent Twitter thread, Rodrigo Seira, Special Counsel for crypto investment firm Paradigm, voiced his criticism against the U.S. Securities and Exchange Commission (SEC) for its pursuit of crypto exchange Bittrex, accusing the regulator of wrongfully attempting to regulate secondary crypto markets. Seira argued that the SEC’s case should be dismissed as it relies on an unreasonable use of the Howey test to support its claims.

Paradigm filed an amicus brief on July 7, asserting that the SEC had exceeded its jurisdiction. Seira also pointed out that SEC Chair Gary Gensler had previously acknowledged the lack of a proper regulatory framework for crypto exchanges, implying that the regulator lacks the authority to oversee these secondary markets effectively. This viewpoint was also expressed in a blog post by Seira on July 7, where he contended that crypto-assets do not involve “investment contracts” and therefore fall outside the SEC’s purview. He further criticized the SEC for failing to engage in the rulemaking requested by Coinbase, leaving the digital-assets industry in a state of regulatory uncertainty.

The SEC initiated its lawsuit against Bittrex on April 17, marking the first of three consecutive cases brought by the regulator against crypto exchanges. Bittrex subsequently surrendered its Florida money transmitter license on April 30 and later filed for bankruptcy on May 8.

Notably, this is not the first time Paradigm has shown support for a crypto organization facing legal action from the SEC. On May 11, the firm petitioned to file an amicus brief in support of Coinbase, claiming that the SEC had not provided clear rules or guidance for U.S. digital asset firms.

Seira’s criticism raises questions about the extent of the SEC’s authority and jurisdiction in regulating the crypto industry, particularly regarding secondary markets. The ongoing legal challenges faced by Bittrex and Coinbase highlight the need for a comprehensive regulatory framework to ensure clarity and stability in the evolving landscape of cryptocurrency markets.

Leave a Reply

Your email address will not be published. Required fields are marked *