Crypto Exchange Bittrex Files Motion To Dismiss SEC’s Lawsuit

Seattle-based crypto exchange Bittrex filed a motion earlier today to dismiss the lawsuit brought by the U.S. Securities and Exchange Commission (SEC). The crypto exchange’s defiance of the country’s top securities regulator came more than two months after it was sued for allegedly operating an unregistered securities exchange, broker, and clearing agency. 

Crypto lawyer James Murphy took to Twitter earlier today to share the latest update in the SEC’s case against Bittrex:

Murphy, who goes by MetaLawMan on Twitter, reported that Bittrex and its founder William Shihara had filed a motion to dismiss the SEC’s case. Shihara was named by the securities regulator in its complaint against the crypto exchange. He served as the former CEO of the exchange. 

According to Murphy, Bittrex requested the dismissal of the SEC’s case on the grounds that contrary to the regulator’s claim, crypto assets traded on the secondary market did not qualify as securities. The latest filing also argued that the SEC failed to provide fair notice of claims in violation of Due Process. 

Taking a page out of Coinbase’s playbook in its legal battle against the SEC, Bittrex cited the Major Questions Doctrine to argue that the SEC lacked the authority to sue a crypto entity. This doctrine states that issues of major political or economic significance are not to be delegated to federal agencies and was used in Coinbase’s recent motion to dismiss the SEC’s lawsuit against it. 

Bittrex filed for Chapter 11 bankruptcy in May, just a month after announcing that it would wind down its operations in the United States. James Murphy indicated that one possible reason for the exchange’s shutdown could’ve been the 6-year-long investigation that the SEC had subjected it to.