It should be noted that the Securities and Exchange Commission lawsuits against the cryptocurrency industry are nothing new, and they are filed regularly. For example, at the end of March 2023, the agency filed a lawsuit against Tron founder Justin Sun. According to the SEC, Justin facilitated the distribution of unregistered securities, which are allegedly TRX and BTT tokens.

However, claiming such a thing is not enough, as the relevant position needs to be proven in court. One would like to believe that Sun has the resources to take legal action that will put an end to the cryptocurrency lawlessness on the part of the SEC. Although no progress has been reported on the case this month.

What’s being sued against Bittrex for

Commission officials have argued that Bittrex was forced to register as an exchange, clearing agency and broker because it provided services to all three types of entities.
The regulator’s director of enforcement, Gurbir Grewal, said the lawsuit against Bittrex “should serve as a wake-up call to other non-compliant crypto market intermediaries”. Here’s the relevant rejoinder from a spokesperson for the agency.

As stated in our complaint, Bittrex’s business model was based on three things: circumventing the registration requirements of federal securities laws, supporting a similar strategy for digital asset issuers and combining multiple market intermediary functions into one to maximize profits.

In other words, we're talking about the regulator's classic claim that a crypto-exchange allegedly had to register with the Commission to provide the relevant services. And it's funny, because the SEC keeps punishing cryptocurrencies retroactively for their actions, which were not previously challenged by the authorities. Agreed, it's strange enough to file a lawsuit against a trading platform after it has been operating in the country for several years. As Binance founder Changpen Zhao previously said, such an approach is the worst of all.

According to CoinDesk sources, last month Bittrex announced it was ready to leave the US market by the end of April, citing the industry’s dire regulatory situation in the country. Back in March, the company received a Wells Notice, a document stating that the SEC was about to start legal proceedings against the exchange. That said, Bittrex’s management is ready to challenge the regulator’s accusations.

In the lawsuit, the SEC alleges that OMG, ALGO, DASH, TKN, IHT and NGC tokens traded on Bittrex are allegedly securities. However, spokespeople for the exchange said that the regulator has not labelled any assets on Bittrex as unregistered securities for a long time, meaning the lawsuit against the platform came as a surprise to its representatives.

However, given the SEC’s recent actions, the regulator’s radical policy seems quite expected. Earlier, the Commission “cracked down” on the Kraken exchange, banning it from providing asset-stacking services to US customers. It also sent another Wells notice to the Coinbase exchange.

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There’s an Algorand coin (ALGO) on the list of the aforementioned tokens that the SEC considers to be securities. With that in mind, a four year old video started circulating in the cryptocurrency fan community on Twitter, in which current SEC Chairman Gary Gensler calls Algorand a “great technology” and a smart contract platform with huge potential.

You can watch the relevant part at the link on Twitter. And below is Gensler’s full speech.

Gensler’s praise for Algorand was delivered to an audience at the MIT conference of 25 April 2019. Gensler was then a professor of economics and management at MIT, according to Cointelegraph. Algorand’s founder, meanwhile, is Silvio Micali, a colleague of Gensler’s who also worked at the institute.

To be fair, Gensler’s speech took place about two months before Algorand’s ICO was completed and the coin was listed on cryptocurrency exchanges. But an economics professor with more experience would have known for sure that there was allegedly “something wrong” with the project. Now, already in his position as head of the SEC, he calls ALGO’s distribution model “illegal”.

As the cryptocurrency community pointed out, if investors had invested $100 in ALGO shortly after Gensler’s speech, they would only have the equivalent of $5 today. And so, given this fact, the Commission should supposedly file a lawsuit against its own chairman, as his blockchain PR for Algorand could well be perceived as a call to mess with the token of the network in question. However, that is clearly not the case right now.

Today, among other things, Gensler will try to explain his own policy towards cryptocurrencies in a hearing before the House Financial Services Committee. The relevant meeting is scheduled to start at 5pm, and will be available at this link. One would like to believe that Gary will clearly answer questions rather than avoid them. Well that will determine his bias against crypto, which in one way or another is already hurting the US economy and the country’s role in the global financial sector.


We believe that the SEC's actions are increasingly obviously hurting the local economy. It makes little sense for cryptocurrencies to stay in the US under these conditions, so they will clearly look to relocate to other jurisdictions. One can only hope that others in power can recognise the scale of the problems in Gary Gensler's position and, in theory, shorten his tenure.


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