Reported by Dave Michaels and Mengqi Sun

Bittrex Inc. once ranked as the country’s biggest platform for trading digital assets. Its rocky history at home is coming to an end with a regulatory threat and a decision to leave the U.S. for good.

The Securities and Exchange Commission’s enforcement staff told Bittrex in March it would recommend that the agency sue the company over alleged violations of investor-protection laws, according to David Maria, the company’s general counsel. 

Seattle-based Bittrex was already prepared to wind down its U.S. operations when it got the notice, Mr. Maria said, citing the difficulty of working with U.S. regulators that have taken enforcement action against over 100 crypto defendants in six years. The SEC declined to comment. 

The outcome shows how aggressive regulatory enforcement could drive some of the industry offshore and underscores how regulators are targeting crypto exchanges,including Coinbase Global Inc., after years of going after the companies that issued digital coins listed on those platforms. The SEC also recently forced Kraken, the second-largest U.S. digital-asset exchange, to stop offering services that allowed users to earn a yield on certain tokens.

SEC Chair Gary Gensler says much of the crypto industry has brushed off investor-protection rules that his agency enforces. He has said exchanges such as Bittrex should register their operations with the SEC, which would require them to dismantle their operations, reduce conflicts of interest and look more like traditional stock exchanges.

Read full report: https://www.wsj.com/articles/sec-targets-bittrex-fallen-giant-of-u-s-crypto-exchanges-4bd615b6