Bittrex, a cryptocurrency exchange based in the United States, could potentially face action from the SEC.

According to a report by The Wall Street Journal on April 16, the United States-based cryptocurrency exchange, Bittrex, is facing the possibility of legal action from the enforcement division of the U.S. Securities and Exchange Commission (SEC) over alleged violations relating to investor protection. This comes despite Bittrex announcing plans to shut down all operations in the United States, citing challenging regulatory and economic conditions.

Bittrex’s general counsel, David Maria, stated that the company had already begun the process of winding down U.S. operations before receiving the SEC’s notice of potential action in March. The SEC’s notice, known as a Wells notice, accused Bittrex of violating laws by operating as an exchange, broker-dealer, and clearinghouse without registering with the regulator. Bittrex had previously discussed registering its operations with the SEC in late 2022, but found that complying with the regulator’s rules would require essentially ceasing all of its revenue-producing activities in the country. Maria stressed that Bittrex’s inability to comply with the SEC rules was due to the agency’s lack of clear regulations for the crypto industry.

Bittrex is unsure whether the SEC will take legal action against the company now that it is terminating operations in the United States. However, if the SEC decides to pursue legal action, Bittrex is reportedly prepared to litigate unless regulators offer a reasonable settlement.

This news follows Bittrex’s announcement in March that it would stop all operations in the United States and advised U.S. customers to withdraw their funds by April 30, 2023. Before this decision, Bittrex had already faced issues in the United States, having agreed to pay over $29 million in fines in 2022 for violating sanctions in the Crimea region, Cuba, Iran, Sudan, and Syria between 2014 and 2017.