Bittrex, a cryptocurrency exchange, has taken a significant step in its legal battle with the U.S. Securities and Exchange Commission (SEC) by submitting a motion to dismiss the lawsuit filed against it.
In the motion, Bittrex has argued that the SEC is without the authority to regulate cryptocurrencies as securities unless explicitly granted by Congress. This stance seeks to establish a more specific regulatory framework for digital assets that acknowledges their distinct characteristics.
Bittrex’s defense is similar to that of Coinbase, as the latter’s arguments have been adopted to defend against the SEC’s lawsuit. This shows a coordinated effort on the part of Bittrex to build a unified defense.
Screenshot of Bittrex’s motion to dismiss. Source: Court Listener
In line with Coinbase, Bittrex is challenging the SEC’s claims concerning investment contracts. Both companies agree that the initial sale of some crypto assets could be classified as securities contracts. However, they argue that the same classification does not apply to those traded on secondary markets, which should instead be considered commodities or another type of digital asset.
Moreover, Bittrex has argued that the SEC did not make it clear that their actions were prohibited, a common defense used by crypto defendants.
The SEC initially alleged in April that Bittrex and its co-founder, William Shihara, were running an unregistered national securities exchange by allowing the trading of digital assets that met the criteria of U.S. federal securities laws without the necessary SEC registration. Additionally, Bittrex Global GmbH, the foreign affiliate of Bittrex, was charged by the SEC for not registering as a national securities exchange.
