SEC Files Complaint Against Malta-Based Bittrex

The US Securities and Exchange Commission (SEC) has filed a complaint against Bittrex, a crypto exchange that established its operations in Malta during the unregulated crypto-craze of 2018 and 2019. Bittrex and its affiliates have since filed for bankruptcy in the wake of the SEC complaint and the closure of its US operations in response to a regulatory crackdown.

Bittrex-related entities Bittrex Malta Holdings Ltd and Bittrex Malta Ltd have also entered bankruptcy, but are still listed as active on the Malta Business Registry. The SEC alleges that Bittrex broke its rules between 2017 and 2022 while earning at least $1.3 billion in revenue, with its time in Malta coinciding with the period under investigation. Bittrex is also listed as the US Treasury’s Office of Foreign Assets Control’s biggest unsecured creditor, owing $24 million from an earlier settlement for failing to prevent customers in Iran, Cuba and other sanctioned nations from using its crypto platform.

Other crypto-companies that set up in Malta during this period, including Binance, have also faced investigation for a variety of crypto-crimes. Binance processed close to $346 million in bitcoin for the Bitzlato exchange, whose founder was arrested by American authorities last week for allegedly running a “money laundering engine”. Bitzlato’s co-founder and majority shareholder, a Russian living in China, was charged with operating an unlicensed money exchange business that processed $700 million in illicit funds. Binance was among Bitzlato’s top three counterparties by the amount of bitcoin received between May 2018 and September 2022.

Binance’s chief strategy officer has admitted that the exchange had shortcomings in its approach to regulatory compliance in the first few years of its rapid expansion, but the company has since changed its ways and is attempting to make a clean break from its early days of shaky regulatory compliance.