Following a significant policy shift at the SEC under President Donald Trump, Bittrex, a crypto exchange that ceased operations after settling an SEC lawsuit during Biden’s term, is now seeking to nullify its settlement. Attorneys for Bittrex have filed a motion this week requesting a federal judge vacate his previous ruling and demand the SEC refund the $24 million penalty paid by Bittrex in 2023.
The SEC had previously sued Bittrex under the Biden administration, alleging that it illegally sold unregistered securities in the form of crypto tokens. The Seattle-based exchange settled, agreeing to pay $24 million, following a previous settlement with the Treasury Department for sanctions violations against countries like Iran, Cuba, and Syria.
After shutting down due to economic inviability in the regulatory climate, Bittrex’s legal team now argues that the SEC’s recent policy change—which no longer classifies most crypto tokens as securities—entitles them to reverse the settlement. The agency has also dropped nearly all similar lawsuits against other crypto firms and exchanges.
In their motion filed on Monday, Bittrex’s attorneys argue: “Two-and-a-half years after securing a settlement from a bankrupt cryptocurrency exchange based on the theory that traded tokens were securities, the SEC (a) admitted this legal interpretation was incorrect, (b) recognized its enforcement approach was flawed from the outset, and (c) dismissed all comparable cases except for this one.”
Furthermore, Bittrex’s attorneys have highlighted that in March, under the current SEC leadership, there was an attempt to redirect the $24 million settlement to the Treasury Department for distribution among harmed former customers of Bittrex.
They are now urging the presiding judge to order the return of these funds before they can be distributed. When contacted by Decrypt, an SEC spokesperson declined to comment on the case.