SEC v. Bittrex, Inc.; Bittrex Global GmbH; and William Hiroaki Shihara, No. 2:23-cv-00580-RSM, Western District of Washington (Apr. 17, 2023) — Complaint

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580                        100 Pearl Street, Suite 20-100
              New York, New York 10004
                                   (212) 336-1100
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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
SEATTLE DIVISION
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SECURITIES AND EXCHANGE COMMISSION,         :
        :
     Plaintiff,                      : 23 Civ. 580
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   - against -                                           : ECF Case
        :
BITTREX, INC., BITTREX GLOBAL GMBH, and  : COMPLAINT
WILLIAM HIROAKI SHIHARA,     : Jury Trial Demanded
        :
     Defendants.    :
                   :
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Plaintiff Securities and Exchange Commission (the “SEC” or the “Commission”), for its
Complaint against Defendants Bittrex, Inc. (“Bittrex”), Bittrex Global GmbH (“Bittrex Global”), and
William Hiroaki Shihara (“Shihara”), alleges as follows:
SUMMARY
1. Since 2014, Bittrex has operated a trading platform (the “Bittrex Platform”) through
which U.S. customers can buy, sell, and trade crypto assets.  The assets made available on the Bittrex
Platform include crypto asset securities.  The Bittrex Platform, like other crypto asset trading platforms,
has merged three functions that are typically separated in traditional securities markets—those of
broker-dealers, exchanges, and clearing agencies—despite the fact that Bittrex has never registered with
the SEC as a broker-dealer, national securities exchange, or clearing agency.  All the while, Bittrex
earned at least $1.3 billion in revenues from, among other things, transaction fees from investors
(including U.S. investors) it has placed at significant risk while servicing them in these unregistered
capacities.
2. Congress enacted the Securities Exchange Act of 1934 (the “Exchange Act”) in part to
provide for the regulation of the national securities markets.  And Congress charged the SEC with
protecting investors, preserving fair and orderly markets, and facilitating capital formation, in part

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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through a series of registration, disclosure, recordkeeping, inspection, and anti-conflict-of-interest
provisions.  These regulatory provisions have led, in turn, to the separation of key functions related to
securities transactions—including those carried out by brokers, exchanges, and clearing agencies—in
part to better protect investors and their assets from conflicts of interest.  By collapsing these functions
into a single platform and failing to register with the SEC as to any of the three functions, and not
having obtained any applicable exemptions from registration, Bittrex has for years defied the regulatory
structures and evaded the disclosure requirements that Congress and the SEC have over the course of
decades constructed for the protection of the national securities markets and investors.
3. Since it launched the Bittrex Platform, Bittrex has been operating as an unregistered
broker (including by soliciting potential investors, handling customer funds and assets, and charging a
fee for these services) and an unregistered clearing agency (including by holding its customers’ assets in
Bittrex-controlled wallets and settling its customers’ transactions by debiting and crediting the relevant
customer accounts).  In addition, since the launch of the Bittrex Platform, Bittrex and, since 2019, its
foreign affiliate Bittrex Global, acting in concert, have operated the Bittrex Platform as an unregistered
exchange by providing a market place that, among other things, brings together orders of multiple
buyers and sellers of crypto assets and matches and executes those orders.
4. Bittrex has carried out these functions despite the fact that the crypto assets it has made
available for trading on the Bittrex Platform have included crypto asset securities.  For years, Bittrex
made calculated business decisions to make assets available on the Bittrex Platform in order to increase
its own revenues, which are primarily based on trading fees from customers, while explicitly
acknowledging that its conduct could invite regulatory scrutiny.  Bittrex’s strategy has been to elevate
increasing its profits over complying with the regulatory framework for securities markets.
5. An important part of this long-running strategy has been Bittrex’s coordinated
campaign, going back to 2017, to direct issuers of crypto assets to “scrub” their public statements of
any language that could raise questions from the SEC as to whether these crypto assets were offered
and sold as securities, while allowing those securities to be traded on its platform.  Bittrex’s coordinated

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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“problematic statement cleanup” campaign was designed to attempt to conceal the true nature of the
offerings from the public and regulators.
6. This campaign included Bittrex directing certain issuers of crypto asset securities that
Bittrex wanted to make available on the Bittrex Platform to first purge public statements of
“investment-related terms” that Bittrex understood could make a crypto asset subject to regulation as a
crypto asset security under the Supreme Court’s decision in SEC v. W.J. Howey Co., 328 U.S. 293 (1946)
and well-established principles of the U.S. federal securities laws.  In other words, Bittrex knew what
statements to ask issuers to “scrub” because it understood the test to determine whether a crypto asset
was being offered and sold as a security.
7. From the launch of the Bittrex Platform in 2014 until late 2019, when he stepped down
as CEO, Shihara directed Bittrex’s operations and activities.  Specifically, Shihara led decisions
regarding which crypto assets to make available for trading on the Bittrex Platform and directed
Bittrex’s “problematic statement cleanup” campaign.  Like Bittrex, Shihara—who was acutely aware of
potential SEC scrutiny of these activities—was financially motivated to make more assets available for
trading on the Bittrex Platform in order to increase Bittrex’s revenues and, in turn, his own
compensation, which totaled at least $130 million.
8. Defendants placed their own financial interests ahead of the interests of the investing
public by failing to comply with the legal requirement that they participate as regulated intermediaries
with concomitant obligations to their customers, including important disclosure and review obligations
designed to protect investors and promote the proper functioning of our capital markets.  In so doing,
and because Defendants neither sought nor obtained any applicable exemptions from registration,
Defendants have violated the registration provisions of the Exchange Act applicable to brokers,
exchanges, and clearing agencies.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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VIOLATIONS
9. By engaging in the conduct set forth in this Complaint, Bittrex and Bittrex Global have
acted as an exchange, and Bittrex has acted as a broker and clearing agency, without registering as an
exchange, broker-dealer, or clearing agency, in violation of Exchange Act Sections 5, 15(a), and 17A(b)
[15 U.S.C. §§ 78e, 78o(a), 78q-1(b)], respectively.  Shihara has violated Exchange Act Sections 5, 15(a),
and 17A(b) [15 U.S.C. §§ 78e, 78o(a), 78q-1(b)] as a control person over Bittrex under Exchange Act
Section 20(a) [15 U.S.C. § 78t(a)].
10. Unless Defendants are permanently restrained and enjoined, there is a reasonable
likelihood that they will continue to engage in the acts, practices, and courses of business set forth in
this Complaint and in acts, practices, and courses of business of similar type and object in violation of
the federal securities laws.
NATURE OF THE PROCEEDING AND RELIEF SOUGHT
11. The Commission brings this action pursuant to the authority conferred upon it by
Exchange Act Section 21(d) [15 U.S.C. § 78u(d)].
12. The Commission seeks a final judgment: (a) pursuant to Exchange Act Section 21(d)(1)
[15 U.S.C. § 78u(d)(1)], permanently enjoining Defendants from violating Exchange Act Section 5, and
Bittrex and Shihara from violating Exchange Act Sections 15(a) and 17A(b); (b) pursuant to Sections
21(d)(3), (5), and (7) of the Exchange Act, (i) ordering Defendants to disgorge their ill-gotten gains and
to pay prejudgment interest thereon on a joint and several basis; (ii) prohibiting Bittrex and Shihara
from continuing to use means or instrumentalities of interstate commerce to accept and display orders
in crypto asset securities from U.S. persons, act as broker or dealer with respect   to crypto asset
securities, or perform the functions of a clearing agency with respect to crypto asset securities, without
registering with the SEC; and Bittrex Global from continuing to use means or instrumentalities of
interstate commerce to accept orders in crypto asset securities from U.S. persons, without registering
with the SEC; and (iii) imposing civil money penalties on Defendants.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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JURISDICTION AND VENUE
13. This Court has jurisdiction over this action pursuant to Exchange Act Section 21(d) [15
U.S.C. § 78u(d)].
14. Defendants, directly or indirectly, have made use of the means or instrumentalities of
transportation or communication in interstate commerce or of the mails in connection with the
transactions, acts, practices, and courses of business alleged herein.
15. Venue is proper in the Western District of Washington pursuant to Exchange Act
Section 27(a) [15 U.S.C. § 78aa(a)].  Bittrex is headquartered in this District and conducts its operations
from this District, Bittrex personnel provide services to Bittrex Global from this District, including
maintaining technology shared by Bittrex and Bittrex Global, and Shihara resides in this District.
DEFENDANTS
16. Bittrex is a Delaware corporation founded in 2014 with its principal place of business
in Seattle, Washington.  Bittrex has operated a crypto asset trading platform servicing U.S. customers
since 2014.  Bittrex is a subsidiary of Aquila Holdings, Inc., a Delaware corporation.  On or around
March 31, 2023, Bittrex announced that it would be winding down its operations in the United States
effective April 30, 2023.  As part of the wind down process, customers were permitted to trade crypto
assets, including crypto asset securities, through April 14, 2023, and will be permitted to withdraw fiat
funds and crypto assets, including crypto asset securities, through April 27, 2023 and April 29, 2023,
respectively.
17. Bittrex Global is a limited liability company organized under the laws of Liechtenstein.
In 2019, Bittrex Global launched a crypto asset trading platform that purports to prohibit U.S.
customers.  Like Bittrex, Bittrex Global is a subsidiary of Aquila Holdings, Inc.  Bittrex personnel in the
United States provide a variety of services to Bittrex Global pursuant to service agreements between
Bittrex and Bittrex Global.  Bittrex also provides Bittrex Global with the technology to operate its
trading platform, including a single matching engine and order book that Bittrex Global shares with
Bittrex, both of which are maintained by Bittrex personnel in the United States.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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18. Shihara, a resident of Redmond, Washington, co-founded Bittrex in 2014 and served as
its CEO until approximately November 2019.  Shihara was a member of Bittrex’s board of directors
from at least 2016 through at least August 2020, and the chair of Bittrex’s “Token Review Committee”
(discussed in Section III.A below) from 2017 to approximately November 2019.  During his time as
CEO, Shihara was responsible for the day-to -day operation and management of Bittrex, including the
hiring and management of employees and outside advisors including attorneys, and was also
responsible for financing activities.  Shihara was also involved in creating Bittrex’s website, from which
the Bittrex Platform is accessed by customers.
STATUTORY AND LEGAL FRAMEWORK
What Is a “Security”?
19. The Exchange Act defines “security” to include a wide range of assets, including
“investment contracts.”
20. Investment contracts are instruments through which a person invests money in a
common enterprise and reasonably expects profits or returns derived from the entrepreneurial or
managerial efforts of others.  As the U.S. Supreme Court noted in Howey, Congress defined “security”
broadly to embody a “flexible rather than a static principle, one that is capable of adaptation to meet
the countless and variable schemes devised by those who seek the use of the money of others on the
promise of profits.”  328 U.S. at 299.  Courts have found a variety of novel or unique investment
vehicles constituted investment contracts, including those involving interests in orange groves, animal
breeding programs, cattle embryos, mobile phones, enterprises that exist only on the Internet, and
certain crypto assets (which crypto asset market participants at times also label “cryptocurrencies”).
The Exchange Act Includes Important Registration Requirements to Regulate and
Control Transactions in the Securities Markets.
21. The Exchange Act governs how securities are transacted in the U.S. securities markets
and imposes obligations on how various intermediaries, including broker-dealers, exchanges, and
clearing agencies, operate in those markets, to protect investors who transact in those markets.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
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22. To fulfill the purposes of the Exchange Act, Congress enacted a regime that requires
registration of, and imposes disclosure obligations on, certain defined participants in the national
securities markets, including but not limited to securities exchanges, brokers and dealers, nationally
recognized statistical ratings associations, security-based swap dealers, self-regulatory organizations, and
clearing agencies, and subjects those participants to SEC and other rules governing their activities.
23. As Section 2 of the Exchange Act [15 U.S.C. § 78b] explains, in enacting the Exchange
Act, Congress found that those obligations are essential to the proper functioning of the national
securities markets and the national economy:
[T]ransactions  in  securities  as  commonly  conducted  upon  securities
exchanges  and  over-the-counter  markets  are  effected  with  a  national
public  interest  which  makes  it  necessary  to  provide  for  regulation  and
control of such transactions and of practices and matters related thereto
... [to] perfect the mechanisms of a national market system for securities
and  a  national  system  for  the  clearance  and  settlement  of  securities
transactions and the safeguarding of securities and funds related thereto,
and  to  impose  requirements  necessary  to  make  such  regulation  and
control reasonably complete and effective, in order to protect interstate
commerce, the national credit, the Federal taxing power, to protect and
make  more  effective  the  national  banking  system  and  Federal  Reserve
System, and to insure the maintenance of fair and honest markets in such
transactions.
24. Congress also determined that “[t]he prompt and accurate clearance and settlement of
securities transactions, including the transfer of record ownership and the safeguarding of securities and
funds related thereto, are necessary for the protection of investors and persons facilitating transactions
by and acting on behalf of investors.”  15 U.S.C. § 78q-1.
Registration of Exchanges:

25. In enacting registration provisions for national securities exchanges, Congress found in
Section 2(3) of the Exchange Act [15 U.S.C. §78b(3)] that:
Frequently  the  prices  of  securities  on  such  exchanges  and  markets  are
susceptible  to  manipulation  and  control,  and  the  dissemination  of  such
prices  gives  rise  to  excessive  speculation,  resulting  in  sudden  and
unreasonable  fluctuations  in  the  prices  of  securities  which  (a)  cause
alternately unreasonable expansion and unreasonable contraction of the
volume  of  credit  available  for  trade,  transportation,  and  industry  in
interstate  commerce,  (b)  hinder  the  proper  appraisal  of  the  value  of

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securities and thus prevent a fair calculation of taxes owing to the United
States and to the several States by owners, buyers, and sellers  of securities,
and  (c)  prevent  the  fair  valuation  of  collateral  for  bank  loans  and/or
obstruct  the  effective  operation  of  the  national  banking  system  and
Federal Reserve System.
26. Accordingly, Section 5 of the Exchange Act [15 U.S.C. § 78e] requires an organization,
association, or group of persons that meets the definition of “exchange” under Section 3(a)(1) of the
Exchange Act, unless otherwise exempt, to register with the Commission as a national securities
exchange pursuant to Section 6 of the Exchange Act.
27. Section 3(a)(1) of the Exchange Act [15 U.S.C. § 78c(a)(1)] defines “exchange” to mean
“any organization, association, or group of persons, whether incorporated or unincorporated, which
constitutes, maintains, or provides a market place or facilities for bringing together purchasers and
sellers of securities or for otherwise performing with respect to securities the functions commonly
performed by a stock exchange as that term is generally understood, and includes the market place and
the market facilities maintained by such exchange.”
28. Exchange Act Rule 3b-16(a) [17 C.F.R. § 240.3b-16(a)] defines certain terms in the
definition of “exchange” under Section 3(a)(1) of the Exchange Act, including “[a]n organization,
association, or group of persons,” as one that: “(1) [b]rings together the orders for securities of multiple
buyers and sellers; and (2) [u]ses established, non-discretionary methods (whether by providing a
trading facility or by setting rules) under which such orders interact with each other, and the buyers and
sellers entering such orders agree to the terms of a trade.”  Exchange Act Rule 3b-16(b) excludes
certain systems from Exchange Act Rule 3b-16(a).
29. A system that meets the criteria of Exchange Act Rule 3b-16(a) and is not excluded
under Exchange Act Rule 3b-16(b) must register, pursuant to Section 5 of the Exchange Act, as a
national securities exchange under Section 6 of the Exchange Act or operate pursuant to an appropriate
exemption.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
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30. Registration of a trading platform as an “exchange” under the Exchange Act is a
bedrock Congressional enactment that permits the SEC to carry out its role of oversight over the
national securities markets.
31. Exchanges properly registered as such under the Exchange Act must enact a set of rules
to govern their and their members’ behavior, and these rules are subject to review by the SEC under
Section 19 of the Exchange Act [15 U.S.C. § 78s].  This review process is designed to ensure that each
of these securities marketplaces continues to operate in a manner consistent with the Exchange Act as
its practices and procedures evolve over time, in part to protect investors and the integrity of securities
markets that affect national commerce and the economy.
Registration of Broker-D
ealers:
32. Section 15(a) of the Exchange Act [15 U.S.C. § 78o(a)] generally requires brokers and
dealers to register with the SEC, and brokers and dealers must also join “self-regulatory organizations”
(“SROs”) as members.  SROs require members to adhere to rules governing their activities.
33. Section 3(a)(4) of the Exchange Act [15 U.S.C. § 78c(a)(4)] defines “broker” as “any
person engaged in the business of effecting transactions in securities for the account of others.”
34. The regulatory regime applicable to broker-dealers is a cornerstone of the U.S. federal
securities laws and provides important safeguards to investors and market participants.  Registered
broker-dealers are subject to comprehensive regulation under the Exchange Act and under the rules of
each SRO of which the broker-dealer is a member.  These regulations and rules include recordkeeping
and reporting obligations, Commission and SRO examination, and general and specific requirements
aimed at addressing certain conflicts of interest, among other things.  All of these rules and regulations
are critical to the soundness of the national securities markets and to protecting public investors who
interact with broker-dealers when transacting in securities on regulated exchanges.
35. To preserve fair and orderly markets, avoid conflicts of interests, and protect investors,
Section 11(a) of the Exchange Act [15 U.S.C. § 78k(a)] generally prohibits broker-dealers that are
members of exchanges from effecting transactions on that exchange for their own accounts.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
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Registration of Clearing Agencies:
36. Section 17A(b) of the Exchange Act [15 U.S.C. § 78q-1(b)] generally makes it unlawful
“for any clearing agency, unless registered in accordance with this subsection, directly or indirectly, to
make use of the mails or any means or instrumentality of interstate commerce to perform the functions
of a clearing agency with respect to any security.”
37. Section 3(a)(23)(A) of the Exchange Act [15 U.S.C. § 78c(a)(23)(A)] defines the term
“clearing agency” as “any person who acts as an intermediary in making payments or deliveries or both
in connection with transactions in securities or who provides facilities for comparison of data
respecting the terms of settlement of securities transactions, to reduce the number of settlements of
securities transactions, or for the allocation of securities settlement responsibilities,” as well as “any
person ... who (i) acts as a custodian of securities in connection with a system for the central handling
of securities whereby all securities of a particular class or series of any issuer deposited within the
system are treated as fungible and may be transferred, loaned, or pledged by bookkeeping entry without
physical delivery of securities certificates, or (ii) otherwise permits or facilitates the settlement of
securities transactions or the hypothecation or lending of securities without physical delivery of
securities certificates.”
38. The regulatory regime applicable to clearing agencies provides important safeguards to
investors and market participants.  Registered clearing agencies are subject to comprehensive regulation
under the Exchange Act and the rules thereunder.  These regulations and rules include recordkeeping
obligations and require SEC examination.  Clearing agencies properly registered as such under the
Exchange Act must enact a set of rules to govern their and their members’ behavior, and these rules are
subject to review by the SEC.  All of these rules and regulations are critical to the protection of
investors, the safeguarding of securities and funds, and the maintenance of fair competition.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
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Registration of Exchanges, Broker-Dealers, and Clearing Agencies Is Essential to the
Proper Functioning of the U.S. Securities Markets.
39. In traditional national securities markets such as those for equity securities, the
functions described above—those of “exchanges,” “broker-dealers,” and “clearing agencies”—have
been carried out by separate legal entities that are independently registered (or exempt from
registration) and regulated by the SEC.  Separation of these core functions aims to minimize conflicts
between the interests of securities intermediaries and investors.  Registration provides the means for the
SEC to understand the business of the securities intermediaries and their relationship with investors in
order to protect those investors and the securities markets, and to prevent fraud or other abuses.
40. Investors in traditional national securities markets do not generally trade directly with
national securities exchanges or clearing agencies but instead are customers of broker-dealers.  Only
broker-dealers (or natural persons associated with a broker-dealer) may become members of a national
securities exchange.  In addition, broker-dealers who have customers must become members of the
Financial Industry Regulatory Authority (“FINRA”), an SRO that imposes its own set of rules and
oversight over broker-dealers, particularly with regard to protecting retail investors.
41. National securities exchanges and clearing agencies must be approved for registration by
the SEC, become SROs, and subject all of their proposed rules and changes to those rules to review by
the Commission.
42. As noted, the Exchange Act also subjects registered intermediaries to important record
keeping and inspection requirements.  For example, Section 17 of the Exchange Act [15 U.S.C. § 78q]
requires registered exchanges, broker-dealers, and clearing agencies to make and keep records as the
SEC prescribes by rule, and subject those records to reasonable periodic, special, or other examinations
by representatives of the SEC.
43. These provisions ensure fair and orderly markets to protect investors, and provide for
oversight over the national securities markets, given the importance of these markets to the economic
health of the nation.  These provisions also seek to ensure, among other things, that investors’

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securities orders are handled fairly and transparently, that securities transactions result in settlement
finality, and that investors’ assets are protected and can be recovered if necessary.  They are also aimed
at ensuring that the SEC and investors have a robust level of disclosures and protections against fraud
and conflicts of interest, and they make securities market intermediaries subject to rigorous external
oversight, regulatory exams, independent auditing, and other review and examination functions.
BACKGROUND ON CRYPTO ASSETS AND CRYPTO TRADING PLATFORMS
What Is a “Crypto Asset”?
44. As used herein, the terms “crypto asset,” “digital asset,” or “digital token” generally
refer to an asset issued and/or transferred using blockchain or distributed ledger technology, including
assets sometimes referred to colloquially as “cryptocurrencies,” “virtual currencies,” digital “coins,” and
digital “tokens.”
45. A blockchain or distributed ledger is a peer-to -peer database spread across a network of
computers that records transactions in theoretically unchangeable, digitally recorded data packages,
referred to as “blocks.”  These systems typically rely on cryptographic techniques for secure recording
of transactions.
46. Some crypto assets may be “native tokens” to a particular blockchain—meaning that
they are represented on their own blockchain—though other crypto assets may also be represented on
that same blockchain.  Like other crypto assets, native tokens may also be sold and traded for
consideration.
Consensus Mechanisms and Validation of Transactions on a Blockchain
47. Blockchains typically employ a “consensus” mechanism that, among other things, aims
to achieve agreement among the blockchain’s network of computers as to a data value or on the state
of the ledger.
48. A consensus mechanism describes the particular protocol used by a blockchain to agree
on, among other things, which ledger transactions are valid, to update the blockchain, and potentially to
compensate certain participants including with additional crypto assets.  There can be multiple sources

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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for the compensation under the terms of the blockchain protocol, including from fees charged to those
transacting on the blockchain, or through the creation or “minting” of additional amounts of the
blockchain’s native crypto asset through the validation of transactions (which may dilute the value of
th e existing tokens).
49. “Proof of work” and “proof of stake” describe the two major “consensus mechanisms”
used by blockchains.  Proof of work, the consensus mechanism used by the Bitcoin blockchain,
involves computers, or validator nodes, attempting to “mine” a “block” of transactions, in part, by
guessing a pre-determined number.  The first miner to successfully guess this number earns the right to
update the blockchain and to be rewarded with the blockchain’s native crypto asset (e.g., for the Bitcoin
blockchain, the reward is in bitcoin).  Proof of stake, the consensus mechanism currently used on
Ethereum, involves selecting block validators from crypto asset holders who have committed or
“staked” a minimum number of crypto assets as part of the validation process.  On Ethereum, rewards
are earned in the blockchain’s native crypto asset, ether.
The Offer and Sale of Crypto Assets
50. Persons have offered and sold crypto assets in fundraising events in exchange for
consideration, including but not limited to through “initial coin offerings” or “ICOs,” “crowdsales,” or
public “token sales.”  In some instances, the entities offering or selling the crypto assets may release a
“whitepaper” or other marketing materials describing a project to which the asset relates, the terms of
the issuance, and any rights associated with the asset.
51. Some issuers continue to sell the crypto assets after the initial offer and sale, and in
some offerings the asset may also be obtained by purchasing it on secondary markets, including but not
limited to crypto asset trading platforms.
Crypto Asset Trading  Platforms
52. Generally speaking, crypto asset trading platforms—like the Bittrex Platform, which is
described in more detail below—are marketplaces that offer a variety of services relating to crypto
assets, often including brokerage, trading, and settlement.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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53. Crypto asset trading platforms allow their customers to exchange crypto assets for fiat
currency (legal tender issued by a country, like U.S. Dollars) or to trade certain crypto assets for other
crypto assets.  “Off-chain” transactions are those where the trades are tracked in the internal
recordkeeping mechanisms of the platform, while “on-chain” transactions are those where the crypto
asset is transferred from one blockchain address to another.
54. Crypto asset trading platforms typically require customers to deposit with the platform
in advance any crypto assets they will seek to sell there, frequently resulting in the platform possessing
and controlling such assets as the legal owner and thus functioning as a central securities depository.
The customers’ crypto assets are then typically tracked and maintained on internal ledgers maintained
by the crypto asset trading platforms, which typically have no legal obligation to segregate a particular
customer’s crypto assets at a separate blockchain address.
55. The graphic user interfaces employed by crypto asset trading platforms—on websites,
apps, or other software—typically emulate and function like traditional securities trading screens:  They
show order books of the various assets available to trade, as well as historical trading information (such
as high and low prices on the platform, trading volumes, and market capitalizations).
56. However, unlike in traditional securities markets, crypto asset trading platforms
(including the Bittrex Platform, as more fully described below) typically solicit, accept, and handle
customer orders for securities; allow for the interaction and intermediation of multiple bids and offers
resulting in purchases and sales; act as an intermediary in making payments or deliveries, or both; and
maintain a central securities depository for the settlement of securities transactions.
57. By contrast, investors participate on registered national securities exchanges through
broker-dealer intermediaries.  The exchange sends executed trades to a registered clearing agency that
takes responsibility for ensuring participants’ collective safekeeping of securities and settlement finality
among those participants and, in doing so, protects investors’ beneficial interests.  Thus, registered
national securities exchanges typically do not assume possession or control of the underlying assets
being traded.  By contrast, crypto asset trading platforms also usually settle transactions by updating

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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their internal records with each investor’s positions, a function that is typically carried out in the
traditional securities markets by clearing agencies—not by the exchanges.
58. Likewise, crypto asset trading platforms typically perform roles traditionally assigned to
broker-dealers in traditional securities markets, without following or even recognizing the legal
obligations and restrictions on activities that accompany status as a broker-dealer.  For example,
unregistered and non-compliant crypto asset trading platforms often do not adequately disclose the risk
that they have the ability and financial incentive to trade crypto asset securities against their own
customers, which could put their customers on the losing side of each trade.
59.   By functioning in roles similar to traditional intermediaries like broker-dealers—but
without registering in those capacities and thereby failing to adhere to their concomitant duties and
obligations to investors—crypto asset trading platforms like the Bittrex Platform harm the interests of
the investing public.
60. For example, a registered national securities exchange is required to have detailed and
transparent standards and procedures for listing and delisting a security.  These rules are designed,
among other reasons, to provide an issuer in danger of falling below the listing standards with
reasonable notice of the potential delisting and an opportunity to remedy the defect.  In addition, a
number of rules are designed to ensure that actual and potential delistings are made known to the
public, so that investors have material information about the businesses in which they invest.
61. By contrast, a crypto asset platform that fails to register in any capacity declares itself
free from any obligation to follow those provisions in the Exchange Act, including the types of rules
described above, that are designed to protect investors, promote the public interest, and provide
truthful and material information to investors.  As a result, investors are at the whim of the crypto asset
platform to give them information about their standards and procedures for listing (and de-listing)
investments, about the investments themselves, including whether any particular listed crypto asset may
potentially be delisted, and the platform’s operations.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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62. A private conversation in or around June 2017 between a Bittrex employee and one of
Bittrex’s three founders illustrates the type of investor harm that can result from a crypto asset platform
failing to follow or even recognize these obligations.  The employee complained to the founder:  “I hate
people bitching that we don’t email them about market removals...I LOST SO MUCH CAUSE I
DIDn’T KNOW.”  The founder responded that his preferred response to those investors was “go f***
yourself” or at a minimum to tell them to “track your own damn investment or get a broker to do it for
you.”
The DAO Report
63. On July 25, 2017, the SEC issued the Report of Investigation Pursuant to Section 21(a) of the
Securities Exchange Act of 1934: The DAO (the “DAO Report”), advising “those who would use ...
distributed ledger or blockchain-enabled means for capital raising[] to take appropriate steps to ensure
compliance with the U.S. federal securities laws,” and finding that the offering of crypto assets at issue
in the DAO Report were offerings of investment contracts and, therefore, of securities.
64. The DAO Report also advised that “any entity or person engaging in the activities of an
exchange must register as a national securities exchange or operate pursuant to an exemption from such
registration,” and “stress[ed] the obligation to comply with the registration provisions of the federal
securities laws with respect to products and platforms involving emerging technologies and new
investor interfaces.”  The DAO Report also found that the trading platforms at issue there “provided
users with an electronic system that matched orders from multiple parties to buy and sell [the crypto
asset securities at issue] for execution based on non-discretionary methods” and therefore “appear to
have satisfied the criteria” for being an exchange under the Exchange Act.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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FACTS
I. THE BITTREX PLATFORM
65. Bittrex was founded in 2014 by Shihara and two other individuals.  Shihara served as
Bittrex’s CEO from the time of its founding until late 2019, and as a member of Bittrex’s board of
directors from at least 2016 through at least August 2020.  Bittrex is headquartered in Seattle,
Washington and, at its peak, had approximately 300 employees.
66. In 2014, Bittrex launched the Bittrex Platform, an online platform that allows customers
to buy, sell, and trade certain crypto assets.  On its website, Bittrex describes the Bittrex Platform as a
“digital currency exchange offering spot market trades between many digital currency and fiat markets”
and as a “crypto exchange for the future.”
67. From 2014 to the present (the “Relevant Period”), the Bittrex Platform made available
more than 300 crypto assets for trading.
68. Through Bittrex’s website, customers could open accounts, deposit funds and crypto
assets, enter orders, and trade crypto assets 24 hours a day, seven days a week.  Customers could also
trade crypto assets through mobile trading applications and Bittrex’s application programming interface
or “API” (a software intermediary permitting two different computer programs to communicate).
69. During the Relevant Period, the Bittrex Platform was available to both retail and
institutional customers, including U.S. residents.  Institutional customers enjoyed   additional “trading
benefits” such as unlimited withdrawals, instant ability to engage in fiat trading, expedited credit for
deposits, priority support, and additional API integration functionality.
70. From 2017 to 2022, Bittrex earned more than $1.3 billion in revenues from transaction
fees charged to customers for these crypto asset trading and related services.  From these revenues,
Shihara was paid at least $130 million in bonuses and profit distributions.
71. As noted above, Bittrex has announced plans to wind down its operations in the United
States effective April 30, 2023.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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II. THROUGH THE BITTREX PLATFORM, BITTREX AND BITTREX GLOBAL
PROVIDE EXCHANGE SERVICES TO U.S. CUSTOMERS, AND BITTREX ALSO
PROVIDES BROKERAGE AND CLEARING SERVICES TO U.S. CUSTOMERS.
72. Neither Bittrex nor Bittrex Global has ever registered with the Commission as a
national securities exchange, and Bittrex has never registered with the Commission as a broker-dealer or
clearing agency.  No exemption from registration applies to either Bittrex or Bittrex Global.
Nonetheless, throughout the Relevant Period, Bittrex (along with Bittrex Global starting in 2019) has
acted as an exchange, and Bittrex has also acted as a broker and clearing agency, including through the
following conduct:
A. Bittrex Solicits Customers.
73. During the Relevant Period, Bittrex regularly solicited   customers to open accounts at
Bittrex and access the Bittrex Platform, including through posts on Bittrex’s website and on social
media.
74. For example, Bittrex posted on Twitter information about crypto assets available to
trade on the Bittrex Platform, trading features of the Bittrex Platform, and links to Bittrex product
announcements.
75. Moreover, certain Bittrex personnel regularly posted   about Bittrex on their personal
Twitter accounts, including re-tweeting information published on Bittrex’s Twitter handle.
76. Bittrex regularly posted comments in the Bittrex forum on the social media platform
Reddit, including posts or comments referring customers to Bittrex’s trading support services and
providing updates about the status of the Bittrex Platform.
77. Bittrex has also marketed monetary incentives and promotions aimed at attracting more
investors to the Bittrex Platform.  For example, in or around March 2020, Bittrex launched the “Bittrex
Referral Program,” which “rewards” existing Bittrex customers who refer new customers to Bittrex by
allowing them to “earn 10% on all commissions of the quote currency from every trade made” by the
customer they referred.  In addition, as recently as the fourth quarter of 2022, Bittrex launched a “New

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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User Reward Program,” which provided a “$10 sign up bonus” to be paid to referrers with respect to
new customers.
B. Bittrex Holds and Controls Customers’ Funds and Crypto Assets.
78. During the Relevant Period, Bittrex required that its customers, before placing orders to
buy or sell crypto assets, transfer their crypto assets into digital wallets and their funds into bank
accounts, both controlled by Bittrex.  Specifically, to deposit crypto assets into a Bittrex trading
account, customers must transfer their crypto assets from an existing digital wallet to a Bittrex-
controlled digital wallet.  Similarly, to deposit fiat currency into a Bittrex trading account, customers
must make a deposit to a Bittrex-controlled bank account using a wire transfer, bank transfer, or other
means.
79. Certain “terms of service” available on Bittrex’s website during the Relevant Period
informed   customers that “Bittrex controls the private keys for the blockchain addresses for deposited”
crypto assets and that customers may not “claim ownership of any particular [crypto asset] based on the
blockchain address, blockchain transfer record or other basis” because they have “authorize[d] Bittrex
to take temporary control of” the crypto assets.
1

80. The terms of service also stated that customers’ crypto assets and fiat currency “are
tracked and maintained on internal ledgers maintained by Bittrex” and that “Bittrex has no obligation to
segregate [a particular user’s] fiat currency in a separate bank account or to segregate any of [a particular
user’s crypto assets] at a separate blockchain address.”  The terms of service further stated that “[f]iat
currency and [crypto assets] are fungible with other like fiat currency and [crypto assets], and, to the
extent [customers] are entitled to withdraw or otherwise receive any funds or [crypto assets], [they] are
entitled to a quantity of fiat currency or [crypto assets] but not any particular fiat currency or [crypto
assets].”

1
 A “private key” is a password known only to the person who controls a crypto asset, which is tied to
the “address” (a long string of letters and numbers on the blockchain, similar to a bank account
number) with which the crypto asset is associated.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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C. Through the Bittrex Platform, Bittrex and Bittrex Global Together Maintain and
Provide a Marketplace for Trading Crypto Assets.
81. According to Bittrex’s website, the Bittrex Platform provides a “custom-built trading
engine” (also known as a matching engine) that ensures customer “orders are executed in real-time.”
82. Customers could trade during the Relevant Period crypto asset “pairs,” which consist of
both a base asset and a quote asset, where the base asset is quoted in terms of the value of the quote
asset in the trading pair.  For example, for the trading pair “BTC-USD,” the base asset, bitcoin, is
quoted in U.S. Dollars.
83. During the Relevant Period, Bittrex maintained individual order books for each trading
pair, which all customers could access via the Bittrex Platform or its API.  All order books resided on a
centralized server maintained by Bittrex.  As discussed below, during the Relevant Period, Bittrex and
Bittrex Global shared a single order book (for those trading pairs that are available on both the Bittrex
Platform and the Bittrex Global platform) and matching engine.
84. As demonstrated below, the design and functionality of the Bittrex Platform is similar to
those of properly registered national securities exchanges, including its (i) display and order book, (ii)
order entry and order types, and (iii) order matching and trading rules.
i. Display and Order Book
85. Bittrex’s website (www.bittrex.com) provides a user-friendly interface for trading crypto
assets on the Bittrex Platform.  The Bittrex Platform displays current and historical pricing information
and other information relevant for trading crypto assets that is akin to what users see on traditional
securities platforms.
86. A tab or link on the Bittrex website called “Markets” leads customers to a page listing
the hundreds of crypto asset trading pairs available for trading on the Bittrex Platform.  This page
provides customers with the current price for the base asset of each trading pair in terms of the quote
asset, the estimated USD value of the quoted asset, the high and low price for each trading pair over

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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the previous 24 hours, the percentage change in price during that same period, and the total value of all
trading of that crypto asset trading pair that occurred over that period.
87. The crypto assets listed on the “Markets” page appear by full name and ticker symbol
and are displayed in descending order from largest to smallest based on the previous 24-hour trading
volume.  The “Markets” page also displays approximately five crypto asset trading pairs under the
category of “trending”; these are the trading pairs that have had the highest volume of trading over the
previous 24 hours and/or the highest percentage of gains or losses in value over that same period.
88. Another link on the Bittrex Platform website called “Trade” leads customers to the
order books for the crypto asset trading pairs available for trading on the Bittrex Platform.  One side of
the order book displays the current buy orders in descending order from highest bid price to lowest,
while the other side of the order book displays the sell orders in ascending order from lowest asking
price to the highest.
89. The “Trade” page also displays charts showing the platform’s trading volume in a
selected crypto asset over specified periods of time (i.e., 1 day, 5 days, 1 month, etc.), last-sale prices,
open orders, and the platform’s computation of the current mid-market price in that asset (i.e., the
middle point between the highest bid and lowest offer) and the spread (i.e., the difference between the

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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highest bid and lowest offer). Below is an example of the user interface display on the Bittrex Platform:

ii. Order Entry and Order Types
90. From the “Trade” page, a user can enter a buy or sell order by inputting a price and
quantity of the asset and the website will calculate the total cost of the transaction including any
transaction fee.  In order to proceed with a trade, the user is then prompted to create an account or, for
existing account holders, to log in using their credentials.
91. Users can then place various types of buy and sell orders, including market orders (i.e.,
an order to buy or sell a crypto asset immediately at the best available price), limit orders (i.e., an order
to trade a specified quantity of an asset at a specified rate or better), or various conditional orders.
When placing orders, customers are required to input the following information: token symbol, size,
price, and time-in-force.
92. The crypto assets on the “Trade” page may be purchased in exchange for U.S. Dollars
or certain crypto assets, including bitcoin.  To place an order on the order book, a trader must have an
available balance of the relevant crypto asset or fiat currency in his or her account to cover the total
value of the order plus any applicable fees.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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93. Bittrex’s order book resides on a centralized server maintained by Bittrex and can be
accessed by customers from Bittrex’s website.
iii. Order Matching and Trading Rules
94. Bittrex provides on its website “detailed trading rules for operating” the Bittrex
Platform.  For example, the Bittrex order book prioritizes orders according to price and then time.  Buy
orders are prioritized in decreasing order of price with the highest bid placed at the top of the order
book, and sell orders are prioritized in increasing order of price with the lowest ask placed at the top of
the order book.  Orders with same price are filled in a first in, first out manner.  Conditional orders are
stored separately from the order book on a reserved basis.  Bittrex places the order on the order book
when an asset’s price meets the pre-specified condition and price.
95. Bittrex also imposes certain trading limits, which include a minimum order size of
10,000 satoshis (each satoshi is one hundred millionth of a bitcoin).  While there is no maximum trade
size, customers must have sufficient funds or crypto assets to cover an order at the time it is placed and
all funds and crypto assets are placed on reserve until the order is executed or cancelled.
96. Bittrex’s terms of service inform customers that, upon placement of an order, their
Bittrex account will be updated to reflect the order and the order will be included in Bittrex’s order
book for matching with orders from other customers.  Customers are also informed that if all or a
portion of their order is matched with another Bittrex customer, Bittrex will execute the trade and
update the customer’s Bittrex account accordingly.
iv. Bittrex and Bittrex Global Share an Order Book and Matching Engine.
97. Bittrex Global operates a crypto trading platform similar to the Bittrex Platform but
purports to restrict U.S. customers from accessing the platform.
98. In late 2022, Bittrex Global made available for trading on its platform approximately
148 of the crypto assets that are available on the Bittrex Platform, including the crypto assets known as
“OMG” and “DASH,” which, as discussed in Section III.B below, were offered and sold as securities.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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99. During the Relevant Period, Bittrex provided support, including shared personnel, to
Bittrex Global for a wide variety of services, including customer onboarding and services related to the
selection of crypto assets made available for trading.
100. During the Relevant Period, Bittrex and Bittrex Global combined their customers’
orders into a single, shared order book.  Bittrex Global’s website displays the order book it shares with
the Bittrex Platform.
101. The combined order book has a single matching engine with the pre-programmed rules
described above, which results in a combined liquidity pool for the hundreds of crypto assets that are
made available on both platforms.
102. As a result, an order from a Bittrex customer could match with an order from a Bittrex
Global customer.
103. The formation and operation of a combined liquidity pool reflects an agreement by
Bittrex and Bittrex Global to act in concert to provide a market place and facilities—the Bittrex
Platform—for bringing together buyers and sellers of crypto assets, including crypto asset securities.
104. During the Relevant Period, Bittrex and Bittrex Global shared control over the
combined liquidity pool and market place.
105. Pursuant to a licensing agreement, Bittrex has provided Bittrex Global the right to use
the technology underlying the shared order book and matching engine, with Bittrex personnel in the
United States responsible for maintaining the technology.
106. As such, though Bittrex and Bittrex Global act in concert in providing this market place
and facilities, Bittrex exercises operational control and unilateral discretion and decision-making over
the Bittrex Platform.
D. Bittrex Settles Customers’ Trades.
107. Pursuant to trading rules posted on Bittrex’s website, “Bittrex settles all filled orders
immediately, by debiting and crediting the relevant balances of assets in both traders’ accounts.”

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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108. During the Relevant Period, Bittrex held all crypto assets traded on the Bittrex Platform
in Bittrex-controlled wallets and settled trades by debiting and crediting Bittrex’s internal ledgers.  If a
customer submitted a request to withdraw funds or crypto assets, Bittrex would transfer the funds or
assets from the Bittrex-controlled bank account or digital wallet to the customer’s designated account
or digital wallet.
E. Bittrex Charges Fees on Executed Trades.
109. Bittrex charges both the buyer and seller of each executed trade a varying fee or
“commission” depending on the trading pair, the price of the executed order, the user’s 30-day trading
volume, and other factors.  As of February 2023, Bittrex’s fee rate ranges between 0.05% and 0.35% of
the principal amount traded.  Bittrex’s website states:  “[T]rading fees are reduced according to the
USD value of [the customer’s] total volume traded by [a customer’s] account over the previous 30
days.”  Bittrex “reward[s] user[s] who drive liquidity to Bittrex” and Bittrex’s website states, “[t]he more
you trade, the more you save.”
III. THE CRYPTO ASSETS TRADED ON THE BITTREX PLATFORM INCLUDE
ASSETS THAT WERE OFFERED AND SOLD AS SECURITIES.
110. Throughout the Relevant Period, the Bittrex Platform has made available for trading
crypto assets that were offered and sold as investment contracts, and thus securities, under Section
3(a)(10) of the Exchange Act and Howey.  Set forth in Section III.B below are specific details regarding
six examples of crypto asset securities that have at various times been made available by Bittrex for
trading on the Bittrex Platform—a non-exhaustive list of such crypto asset securities.
111. In an effort to grow the Bittrex Platform and boost its own trading profits, Bittrex—
without registering with the SEC in any capacity—made strategic decisions to add new crypto assets to
the Bittrex Platform even though the assets had characteristics of securities.  Even before the SEC
issued the DAO Report, Bittrex was in fact highly cognizant of the risk that it was permitting investors
to trade in securities available on the Bittrex Platform.  In order to avoid scrutiny by the SEC, Bittrex
engaged in a coordinated effort with the issuers of those crypto assets to delete—or “scrub”—from the

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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issuers’ offering and marketing materials any “investment-related terms” that would reveal that these
assets were offered and sold as securities, such as “price prediction[s]” and statements related to
“expectation of profit”  —without actually altering the economic substance of the offerings.
A. In an Effort to Maximize Its Trading Profits, Bittrex Added Crypto Assets to the
Bittrex Platform Despite Regulatory Concerns, While Coordinating a Campaign
to “Scrub” Potentially Problematic Public Statements About These Assets.
112. Bittrex had a strong financial incentive to make additional crypto assets available for
trading on the Bittrex Platform because Bittrex’s primary source of income was trading fees paid by
Bittrex customers (which amounted to over $1.3 billion from 2017 to 2022).  And adding new assets,
according to a Bittrex employee responsible for managing the listing process for such assets, “kept user
interest up.”
113. As a Bittrex shareholder, Shihara similarly had a personal financial incentive to add new
assets to the Bittrex Platform because increased trading fees earned by Bittrex meant more revenues for
Bittrex.  This also resulted in higher compensation to Shihara, whose compensation was directly tied to
Bittrex’s revenues.  Indeed, between April 2017 and March 2020, Shihara received at least $130 million
in bonuses and profit distributions.
114. Bittrex and Shihara had in place monthly targets for the number of new crypto assets
that would be made available on the Bittrex Platform.
115. When deciding whether to include an asset on the Bittrex Platform, Bittrex assessed
whether the financial benefits of doing so outweighed the risk that the asset in question would be
subject to scrutiny by regulators, including specifically the SEC.  For example, in or around March
2017, Shihara told the other Bittrex co-founders with regards to a particular crypto asset:
the  problem  is  that  its  going  to  be  seen  by  the  SEC  as  a  security.    im
meeting with these guys face to face to get specifics on how much they
want to raise, who they are raising it from, and what they expect the after
market to be.  its a big enough opportunity that we might want to roll the
dice on the sec investigation.  we have a couple of paths forward but one
idea was to have them take a position in bittrex and own the risk of an
SEC investigation with us.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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i. Until 2017, Bittrex Did Not Ha ve a Formal Process or Policy in Place for
Determining Whether to Make a Particular Crypto Asset Available on the
Bittrex Platform.
116. For the first several years of its operation, Bittrex’s “compliance review” for prospective
crypto assets primarily consisted of informal review of the whitepaper published by the issuer of the
crypto asset and a request that the issuer provide Bittrex with any legal analysis it had performed as to
the asset.
117. In late 2017, Bittrex for the first time established a formal process for determining
which assets to admit to the Bittrex Platform which included analyzing whether the assets were offered
and sold as securities.  As an initial step, issuers would submit a form on Bittrex’s website initiating a
“preliminary review” of the asset by Bittrex.  Bittrex would then use this form to determine which
crypto assets should proceed to a “full evaluation.”
118. The “full evaluation” stage was conducted by Bittrex’s “Token Review Committee” (the
“Committee”).   The Committee was formed in 2017 and was composed of at least five members with
Shihara as its chair.  As part of the “full evaluation,” the Committee conducted an additional review of
the asset, including gathering information from the issuer of the asset such as a legal opinion from
counsel retained by the issuer as to whether the asset was offered and sold as a security, and then voted
on whether to include the asset on the Bittrex Platform.
119. In 2017, Bittrex engaged two law firms to conduct legal analyses of whether crypto
assets were offered and sold as securities and to advise Bittrex on whether to make the assets available
for trading on the Platform.
120. In or around August 2017—shortly after the SEC issued the DAO Report—Shihara,
along with two other members of the Committee, prepared a “coin compliance check list” concerning
the crypto assets then available for trading on the Bittrex Platform.  Shihara instructed the other
Committee members that the checklist should include reviewing marketing materials for words like
“DAO, shareholder, shares, profit, dividends” that would cause the SEC to “want to investigate,” as
reflected in the below email:

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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121. Bittrex was aware that if a crypto asset had been marketed as an investment, it would be
more likely to satisfy the legal test for a security.  For example, in or around July 2017, Shihara
instructed an issuer that it “should not market [its token] as any kind of investment.  Stick to utility
token so none of us get into trouble.”
ii. Bittrex Coordinated with Issuers of Crypto Assets to “Scrub” Public
Documents in an Effort to Avoid “Unwanted Attention from the SEC.”
122. To further its dual goals of making more crypto assets available on the Bittrex Platform
and avoiding regulatory scrutiny, starting in at least May 2017, Bittrex routinely directed that crypto
asset issuers “scrub” their offering and marketing materials of “investment-related terms,” including
language that would “get unwanted attention from the SEC.”  Bittrex regularly asked issuers to remove
“problematic statements” from their marketing materials—statements indicating that the asset was
marketed as a security—as a prerequisite for making the issuers’ crypto assets available for trading on
the Bittrex Platform.  Bittrex unofficially dubbed this practice the “problematic statement cleanup.”
123. The “problematic statement cleanup” was nearly always done after the initial offering of
the crypto asset—i.e., after the crypto asset had already been offered and sold to investors.  In other

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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words, the issuers of the crypto assets had already marketed, offered, and sold the crypto assets to the
investing public by using the very “problematic statements” that Bittrex recognized were “investment-
related terms” that indicated the assets could be securities.  In requiring issuers to “scrub” their
documents, Bittrex did not actually change the economic reality of those offers and sales, but rather
simply attempted to remove or “scrub” any evidence of these public statements without changing the
actual characteristics of the offering or asset even assuming the deletions were successful.
124. For example, in a discussion on Slack between Bittrex and the issuer for the crypto asset
security known as “NGC” in or about April 2018—months after the NGC ICO—NGC’s issuer told
Bittrex:
We   have   removed   everything   related   to   growth,   indication   as
“investment,” coin price or any posts in relation to projections, growths
or forecasts . . . . This was pure legacy and we are moving fast to ensure
delivery  of  our  roadmap  .  .  .  .  Also  we  updated  the  roadmap  and
whitepaper.  We removed all old links that were posted in threads over
the last 4 months.  Everything is deployed to production, our entire team
feels that everything is removed related to the raised concerns.

125. In another example, in connection with making the crypto asset security known as
“TKN” available for trading on the Bittrex Platform, Shihara reminded the TKN issuer team (on the
very same day that it completed its initial public sale of TKN tokens) to “scrub” its documents of
“investment related terms”:

126. As part of the “problematic statement cleanup,” Shihara and other Bittrex employees
also reviewed issuers’ whitepapers and marketing materials, including social media communications,

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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and then instructed the issuers, usually in messages through private Slack channels, to remove or
“scrub” “problematic statements.”  As chair of the Committee until at least November 2019, Shihara
directed the “problematic statement cleanup.”
127. As part of the “scrubbing” campaign, Bittrex even provided its employees with a “cheat
sheet” as a guide to identifying and addressing “problematic features” and “problematic statements.”
The “cheat sheet,” excerpted below, was affixed to the checklist that Bittrex used
to document its review of issuer applications and accompanying documentation, as well as the final
recommendation of the Committee:

128. Other examples of Bittrex’s “problematic statement cleanup” include:
a. On or about May 24, 2018, two Bittrex employees told a different issuer team:
“[O]ur attorney was a little concerned about any statements on your social media
that can be related to price forecasting ... we can work with you folks to clean up
any statements viewed as problematic ... things that can be considered pumping
price is speculating about price or volume in social media.  Make sure stuff like
that is cleaned up.”
b. On or about July 26, 2018, a Bittrex employee told the issuer team for a crypto
asset:  “please be sure to review all social media postings and remove any tweets,
or retweets of items that are speculative or encouraging increasing the price of
the token trading on exchanges ... Please go through the feed and clean up
anything problematic/speculative.”
c. On or about August 20, 2018, a Bittrex employee told a different issuer team:
“when we look at listing projects, we also review social media feeds, white paper
and website for problematic statements that are speculative in nature.  The

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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following are statements/comments identified by our outside counsel that they
would like to see removed or cleaned up.”
129. Bittrex made dozens of crypto assets available for trading on the Bittrex Platform after
directing such “problematic statement cleanup” of the issuer’s public statements, including the crypto
asset securities NGC and TKN, as well as the crypto asset security known as “IHT.”
iii. Bittrex Removed from the Bittrex Platform Certain Problematic Assets
and Later Made Them Again Available on the Platform in an Effort to
“Remain Relevant.”
130. In April 2019, SEC staff issued the “Framework for ‘Investment Contract’ Analysis of
Digital Assets.”  Shortly thereafter, starting in April 2019, Bittrex removed from the Bittrex Platform a
number of crypto assets, including crypto assets that had been subject to Bittrex’s “problematic
statement cleanup.”
131. However, in an effort to “remain relevant” among other crypto trading platforms,
Bittrex later restored for trading certain crypto asset securities that it had previously removed from the
Bittrex Platform due to regulatory concerns, including DASH and OMG.
iv. Bittrex Made Available for Trading a Number of Crypto Assets that
Bittrex Recognized Had the Characteristics of Securities.
132. Bittrex made numerous crypto assets available for trading on the Bittrex Platform, while
ignoring factors indicating that various crypto assets were likely offered and sold as securities.
133. For example, as part of its evaluation of the crypto asset security known as “MANA,”
Bittrex recognized that the token had multiple factors that indicated it was likely offered and sold as a
security, including that the issuer “raised approximately $5M USD from investors ... [who] ... received
a discount ranging from 5 to 15%,” and that the issuer purportedly prohibited U.S. persons from
participating in the offering because the issuers had “not yet made a final determination as to the status
of MANA Tokens under U.S. federal securities laws.”  Shihara and other Committee members
nevertheless voted to approve MANA for admission to the Bittrex Platform.
134. Similarly, in deciding to make the crypto asset security known as “POWR” (which
Shihara described at the time as #3 on his “token priority list”) available on the Bittrex Platform,

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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Bittrex ignored clear indications that POWR was marketed, offered, and sold as a security.  In an e-mail
to the Committee on or about October 11, 2017, a Bittrex employee told Shihara that there were “some
controversial statements for [the POWR] offering,” including the “Asset Germination Events”
described in the Power issuer’s whitepaper, which defined such events as: “the sale or crowdfunding of
an autonomous renewable energy asset which allocates ownership and distribution of income.”  Shihara
acknowledged but ignored the issuer’s “controversial statements,” and Bittrex subsequently made the
crypto asset security POWR available for trading on the Bittrex Platform.
B. The Bittrex Platform Makes Available for Trading Assets that Were Offered and
Sold as Securities.
135. Each unit of a particular crypto asset on the Bittrex Platform trades at the same price as
another unit of that same asset.  Because these assets are interchangeable (e.g.,   any OMG or fraction
thereof is just like any other), all tokens of the same issuance increase or decrease in value in the same
amounts and to the same extent, such that one token is equal in value to any other one token of the
same name and issuance.  The purchase of any particular token does not appear to give an investor any
special rights that are not available to any other investor in that type of token, such as separately
managed accounts, or to capital appreciation or returns that are independent of the returns that may
inure to other investors in the same token.
136. The tokens on the Bittrex Platform are available for sale broadly, to any person who
creates a trading account with the Bittrex Platform, regardless of whether that person treats it as
anything other than as an investment.  In other words, the Bittrex Platform does not restrict crypto
asset purchasers to those who might purchase the token for purported consumptive use or who acquire
it for any other purported non-investment purpose.  To the contrary, the “Trade” page displays
changes in prices for the crypto assets similarly to trading platforms that allow investors to transact in
securities registered under the Exchange Act.  (Again, t he difference is that, unlike with the Bittrex
Platform, investors transacting in registered securities on trading platforms are doing so through
regulated brokers in regulatory-compliant securities markets, not directly with exchanges).

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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137. The Bittrex Platform does not restrict how many units of a crypto asset any given
investor may purchase.  Investors are not required to purchase quantities tied to any purported non-
investment “use,” if any, that may exist for the asset.
138. The assets available for sale on the Bittrex Platform are transferable, and eligible for
resale on the Bittrex Platform or other crypto asset trading platforms immediately upon purchase and
without any apparent restrictions on resale.
139. It is therefore not surprising that many of the tradeable crypto assets on the Bittrex
Platform have characteristics indicating that they may be available to U.S. investors who make an
investment of money in a common enterprise with a reasonable expectation of profits derived from the
efforts of others.
140. Indeed, Bittrex made available for trading on the Bittrex Platform crypto assets that
have been the subject of prior SEC enforcement actions, including but not limited to EOS, Enigma,
Unikrn, SALT, and HYDRO.
141. For purposes of prevailing on the Exchange Act claims set forth herein, the SEC need
only establish that Bittrex transacted in a single crypto asset security.  Nevertheless, set forth below are
specific details regarding a non-exhaustive list of six examples of crypto asset securities available for
trading on the Bittrex Platform:
i. OMG
142. The so-called OMG Network, previously known as OmiseGO, was founded in 2017.
In or around December 2020, Genesis Block Ventures (“GBV”), a Hong Kong-based venture capital
firm, acquired the OMG Network.  In or around February 2021, the OMG Network partnered with
another entity to develop the so-called Boba Network.  In or around August 2021, the OMG Network
changed its name to the “OMG Foundation” and the following year became the “BOBA Foundation.”
143. The OMG token was issued by the OMG Network as a “proof-of-stake” token on the
OMG Network.  The OMG Network held an ICO on or about June 24, 2017, raising approximately
$25 million through the sale of OMG tokens to the public in exchange for ether.  The OMG Network

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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issued a maximum supply of approximately 140.2 million OMG tokens, and sold approximately 65.1%
of this supply to the public in the ICO.
144. Today, OMG tokens are available for buying, selling, and trading on several crypto asset
trading platforms in exchange for fiat currency (namely U.S. Dollars) or certain crypto assets.  OMG
was made available for trading on the Bittrex Platform in or around July 2017.  After being removed
from the Bittrex Platform in June 2019, OMG was again made available for trading on or about April 9,
2021.  OMG was also available for trading on the Bittrex Global platform.
145. From the time of its offering and continuing through the Relevant Period, OMG has
been offered and sold as an investment contract and therefore a security.  After it was listed on Bittrex
for trading, the ever-changing management of the OMG Network continued to tout its efforts to grow
the value of OMG and the investment opportunities OMG presented.
Purchasers of OMG invested in a common enterprise.
146. The OMG Network pools the proceeds from OMG token sales to fund the
development, marketing, business operations, and growth of the OMG Network, as reflected in
OMG’s “Crowdfunding Whitepaper,”    which used the following chart to explain how funds raised
during the ICO would be used to develop the network:

147. Specifically, the OMG whitepaper explained that the “[m]ajority of the funds raised will
go towards the development of open source software.  Overall fund usage will be split approximately
2:1 ratio between network and end-user application development.”  The whitepaper also detailed how

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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the “budget” would be used, which included items such as “[c]onstruct and roll-out blockchain,
including full node client,” and “[c]onstruct and roll-out decentralized custody of funds.”
148. The stated distribution of the OMG tokens tied the fortunes of the OMG token holders
together and to the fortunes of the promoters.  For instance, the OMG tokens were allocated as
follows: 65.1% for purchase by the public; 20% for “future costs and uses including use for network
validation as part of the development and execution of the project” as a “reserve”; 9.9% for OMG
“team members and key contributors who worked to develop the ideas, supporting structures and
actual implementation of the OmiseGO Project”; and 5% for an airdrop to ether token holders to
“encourage incentive alignment with the Ethereum mainnet.”  Even after the ICO, and through
changes in management, the promoters of OMG continued to tout the connected fortunes of OMG
token holders and the promoters.
149. The price of all OMG tokens goes up or decreases together.
Investors in OMG had a reasonable expectation of profits based on the efforts of others.
150. In addition to the public statements cited above, in connection with the ICO and
continuing after OMG was listed on the Bittrex Platform, OMG’s promoters disseminated information
that led OMG token holders to reasonably expect to profit from the promoters’ efforts to grow the
OMG Network.
151. For example, the whitepaper touted the experience of the parent holding company
(Omise Holdings Pts. Ltd.), the OMG Network team, and advisors that would contribute to building a
successful blockchain network—the usage of which would derive value to the OMG token holders.
The whitepaper stated that “[o]ur technical team is led by experienced professionals who have track
records in high growth technology startups” and that they had the “best setup to implement this
project” given the parent holding company’s “established track record in building a fast-growing fintech
startup in the payments and value-transfer landscape.”
152. Further, materials available at the time of the ICO indicated that the development of the
platform by the OMG Network team could lead to profits for OMG token holders.  For instance, the

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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whitepaper provided that “[a]t the OmiseGo Network layer, token holders will be eligible to earn
transaction fees for interchange payments and decentralized exchange.  Activity ‘on-chain’ will pay
transaction fees to token holders for validating the network.”
153. Moreover, the OmiseGo website at the time of the ICO indicated that OMG token
holders could anticipate receiving a share of the fee revenue generated on the platform, and a document
purporting to establish the terms under which users purchased OMG during the ICO clarified that
potential for profit was linked to efforts of the OMG Network team (“[W]hile the individuals and
entities . . . assigned to [create the network] will make reasonable efforts to develop and complete
OmiseGO, it is possible that such development may fail and User’s OMG may become useless and/or valueless due to
technical, commercial, regulatory or any other reasons” (emphasis in original)).
154. Even after the OMG Network released a beta version of its platform in mid-2020
(which did not exist at the time of the ICO), the OMG Network team continued to emphasize their
commitment to developing the network.  For instance, in or around June 2020 (more than two years
after OMG was listed on the Bittrex Platform), the OMG Network team expressed an intended focus
on future marketing for the platform:  “We’ve always followed the mantra that our work will speak for
itself in the market place and we’ve gone very light on the marketing—focusing instead on top-notch
engineering and solid business development.”  In or around October 2020, the OMG Network’s CEO
wrote that for the remainder of 2020 the OMG Network “team remains focused on onboarding our
CeFi partners to build out the Layer-2 value transfer use-case and improve the protocol and UX” and
that the “goal is to get OMG Network technology embedded into a network of merchants and
enterprises, so it becomes the go-to protocol for value transfer.”
155. Similarly, while the management of the OMG Network continued to change hands, the
new teams still stated publicly that they would focus on making efforts to achieve growth for OMG.
For example, at the time of the acquisition by GBV in or around December 2020, the OMG Network
stated, “Today, @genesisblockhk acquires OMG Network.  We’ll work together to grow our ecosystem
and accelerate the adoption of OMG Network as the value transfer layer for #Ethereum!”  And in

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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November 2021, the new team touted, “OMG was trading around $3-4 when the current team took
over.  Fair to say quite a bit of value has been created since then between OMG and BOBA.”
156. Upon acquisition of the OMG Network in December 2020, GBV promised to continue
to “promote the accelerated growth of OMG Network, and further enhance the adoption of OMG
blockchain in Asia and beyond.”
157. These statements led reasonable OMG investors to expect that the demand for OMG
would likely increase based on the OMG Network’s efforts to increase demand for its technology,
thereby potentially resulting in a price increase for OMG.
ii. DASH
158. Dash is a blockchain protocol that was launched on or about January 18, 2014 by
founder Evan Duffield.  According to its website, www.dash.org, Dash is a crypto payment platform
forked from the Bitcoin source code.
159. “DASH” is the native token of the Dash blockchain and is the token used to pay
transaction fees required to propose transactions on the blockchain.  The platform has built proprietary
mobile and desktop wallet applications available on the Google Play store and Apple’s App Store.
There is a maximum supply of approximately 18.92 million DASH tokens.
160. Dash’s initial distribution of DASH tokens was in the form of rewards to miners that
provided value to the DASH network by mining blocks for the blockchain.
161. Today, DASH tokens are available for buying, selling, and trading on several crypto
asset trading platforms in exchange for fiat currency (namely, U.S. Dollars) or certain crypto assets,
including bitcoin.  DASH has been available for trading on the Bittrex Platform since 2014.  After
being briefly removed on or about December 29, 2020, DASH was again made available for trading on
the Bittrex Platform on or about September 1, 2021.  DASH has also been available for trading on the
Bittrex Global platform.
162. From the time of its offering and continuing through the Relevant Period, DASH was
offered and sold as an investment contract and therefore a security.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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Purchasers of DASH invested in a common enterprise.
163.  Today, Dash claims to be run by a subset of its users, which are called “masternodes.”
2

Masternodes are servers that provide a second layer of services and governance on the Dash blockchain
on top of the services provided by standard nodes.  Ten percent of the block rewards that are generated
from mining each month are sent to the Dash Treasury to fund improvements to the Dash platform
and DASH token.  The bulk of the 10% of the block rewards are distributed to DCG (Dash Control
Group), an entity controlled by the Masternodes. (The Masternodes and the regular nodes split the
remaining 90% of the block rewards, with the Masternodes receiving a little over half of that 90%.).
The Masternodes vote on all funding proposals, so the Masternodes are in essence voting to fund
DCG, since DCG submits the majority of the proposals that get approved and funded from the Dash
treasury.  The Masternodes also indirectly control DCG through the Masternodes’ voting control over
the trust which is the sole shareholder of DCG.  DCG’s improvements to the Dash platform and the
DASH token increase the DASH token’s value, thereby benefitting all token holders.  Accordingly, the
fortunes of the investors (i.e., the non-Masternode token holders) are tied to the fortunes of the
Masternodes and DCG.

164. Below is a breakdown of how rewards are purportedly distributed on the Dash
platform:

2
 A “node” on a blockchain generally means one of the computers that run the blockchain software to
validate and store the history of transactions on the network.  Only those who stake 1,000 DASH and
have the sufficient server capacity to provide the advanced services offered by Dash can become a
“masternode” owner.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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165. The price of all DASH tokens increases or decreases together.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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Investors in DASH had a reasonable expectation of profits based on the efforts of others.
166. From the founding of the Dash platform, Dash has created a business model and
disseminated information that led DASH holders to reasonably expect to profit from Dash’s efforts to
develop, expand, and grow the protocol.
167. For instance, Duffield purportedly launched DASH to improve on Bitcoin’s relatively
slow transaction times and privacy issues.  To address this, he invented an algorithm used for
calculations on the DASH blockchain,

which Dash touts as “one of the safest and more sophisticated
cryptographic hashes in use by modern cryptocurrencies.”

Subsequently, Duffield also invented
“InstantSend,” which Dash touts as enhancing DASH’s speed by allowing users to transfer DASH
without waiting for the transactions to be confirmed on the blockchain, and “PrivateSend,”

which Dash
touts as enhancing DASH’s privacy by making transactions more difficult to trace.
168. Further, DCG uses the DASH it receives from the Dash treasury to fund performance
enhancements and to add features to the Dash platform.  For instance, DCG works to advance DASH
as a medium of payment.  Dash’s website states that DASH can be spent at “thousands” of retailers
through a “DashDirect” consumer app and, in or around May 2022, Dash tweeted, “DCG is a [Dash
Funded Organization] with a dedicated team working for the Dash network that is responsible for the
main development of Dash.  Its mission is to provide greater financial freedom by delivering and
improving financial solutions which are secure, reliable, decentralized, and usable for all.”
169. Dash also promotes its token’s superiority over other tokens due to the attributes it has
developed, namely greater scalability of the protocol (which increases usability), short processing times,
and low transaction costs.  Accordingly, as the use of DASH expands, the demand for DASH will
increase, and its value will rise.
170. Finally, the value of DASH is further enhanced by the fact that the token has a limited
supply and is deflationary in nature.  For example, the Dash website explains that the block reward is
reduced by approximately 7% every 210,240 blocks (approximately every 380 days).

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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iii. ALGO
171. Algorand is a blockchain protocol founded by Silvio Micali.  The Algorand blockchain
uses a consensus algorithm it calls “pure proof-of-stake,” in which each user’s ability to influence the
choice of a new block is proportional to its stake (number of tokens) in the system.
172. “ALGO” is the native token of the Algorand blockchain, and has a maximum supply of
10 billion ALGO minted at the launch of the Algorand network.  Because ALGO is the native token of
the Algorand blockchain, those utilizing the Algorand blockchain need to hold (and potentially stake)
certain amounts of ALGO.
173. The Algorand Foundation Ltd. (the “Algorand Foundation”) conducted an initial
ALGO token sale on or about June 19, 2019, selling 25 million tokens at $2.40 per ALGO, raising
approximately $60 million.  In advance of the token sale, the Algorand Foundation promoted the token
sale on Twitter, and included a link to its website.
174. The Algorand Foundation promoted the June 19, 2019 token sale in part with a refund
policy that allowed ALGO investors to return the ALGO to the Algorand Foundation one year later at
90% of the original purchase price.  The Algorand Foundation explained the economic rationale behind
the refund policy by noting its own belief in and commitment to the value of ALGO, stating:  “We
believe in the underlying value of the Algorand blockchain, the Algo, and the potential of the borderless
economy.  Our goal is to invest in the growth, sustainability and performance of that economy.”
175. In other words, in promoting the ALGO token sale, the Algorand Foundation tied the
potential growth of the Algorand blockchain to potential demand for the ALGO token itself, and to its
own commitment to preserving a price floor for ALGO.
176. In or around August 2019, the Algorand Foundation publicly offered ALGO investors
an early refund opportunity, and ALGO investors returned a total of approximately 20 million ALGO
tokens to the Algorand Foundation in exchange for a refund that was 85% of the original purchase
price.  In or around June 2020, ALGO investors who did not refund their ALGO tokens in August

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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2019 were publicly offered a second refund window.  ALGO investors returned a total of
approximately 5 million ALGO tokens for a refund that was 90% of the original purchase price.
177. Through its rewards programs and incentive structures, the Algorand Foundation
continued distributing tokens after the June 2019 token sale.  As of September 2022, approximately 6.9
billion ALGO were in circulation.
178. Today, ALGO is available for buying, selling, and trading on crypto asset trading
platforms in exchange for fiat currency (namely, U.S. Dollars) or certain crypto assets, including bitcoin.
ALGO was available for trading on the Bittrex Platform and the Bittrex Global platform from
approximately April 2020, and is currently available on both platforms.
179. From the time of its offering and continuing through the Relevant Period, ALGO was
offered and sold as an investment contract and therefore a security.
Purchasers of ALGO invested in a common enterprise.
180. Today, two entities are responsible for Algorand:  (1) the Algorand Foundation, an
organization purportedly focused on Algorand “protocol governance, token dynamics and supporting
grassroots, open-source development on the Algorand ecosystem,” which was incorporated in
Singapore; and (2) Algorand, Inc., a company purportedly focused on “layer-1 development of the
Algorand Protocol and enabling Enterprise adoption of Algorand blockchain technology.”
181. The Algorand Foundation and Algorand, Inc. purportedly collaborate on projects and
initiatives for the Algorand community.
182. Shortly before the June 19, 2019 ALGO token sale, Steven Kokinos, the CEO of
Algorand, Inc., posted a publicly-available article stating:  “(a) We will be holding our founder’s tokens
for the long term and will not be selling them.  (b) We will use our founder’s tokens to participate in
consensus and assist in securing the network, though we will never represent more than 49% of the
voting.  (c) We will use our founder’s tokens to support the ecosystem and encourage development.”

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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183. The Algorand Foundation purportedly owns 500 million ALGO tokens and the
participation and governance rewards associated with those tokens.  Also, members of the Algorand
Foundation’s board of directors and its advisory committees receive ALGO as compensation.
184. In addition to the tokens it owns, as of September 2022, the Algorand Foundation also
controls over 3 billion ALGO tokens in wallets publicly identified as for “Community & Governance
Rewards,” “Ecosystem Support,” and “Foundation Endowment,” signaling to the public that the
Algorand Foundation would use the ALGO tokens to support the ALGO economy or ecosystem as
well as to reward itself and participants in this ecosystem.
185. The price of all ALGO tokens goes up or decreases together.
Investors in ALGO had a reasonable expectation of profits based on the efforts of others.
186. The publicly available information disseminated by Algorand, Inc. and the Algorand
Foundation led ALGO investors to reasonably expect to profit from Algorand, Inc.’s and the Algorand
Foundation’s efforts to grow the Algorand protocol, which would in turn potentially increase demand
for, and therefore the value of, the ALGO token itself.
187. In public statements on Twitter, as well as on their respective websites, Algorand, Inc.
and the Algorand Foundation promote the Algorand protocol.
188. Until approximately May 14, 2022, the Algorand Foundation promoted that ALGO
investors could receive participation rewards (purportedly a form of staking by delegation) by
“participation in the Algorand ecosystem via holding Algo in an online wallet.”
189. As of approximately May 14, 2022, the Algorand Foundation publicly stated that it
would replace the participation rewards that ALGO holders were entitled to receive with so-called
governance rewards.  The Algorand Foundation described “Governance” as a way for investors to
make investment returns on their ALGO purchases—stating it is “a decentralized program which
allows Algo holders to vote on the future of Algorand” and “the best way to earn rewards for holding
Algo, with APY% of 10.02% - 14.05% seen in previous periods.”

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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190. The Algorand, Inc. and Algorand Foundation websites tout their teams’ technical
experience and expertise in the areas of cryptography and business development.  For example,
Algorand, Inc.’s website states:  “Blending technical mastery and professional stability, the Algorand
team consists of internationally recognized researchers, mathematicians, cryptographers, and
economists along with proven business leaders from global technology companies.”
191. In a March 2022 report, the Algorand Foundation publicly stated that it had started a
new program to incentivize the “growth of the ecosystem, which is the fundamental need of a maturing
blockchain.  The program includes a series of loans to help the growth of our DeFi network and to
expand the institutional investments in the ecosystem ... The Algorand Ecosystem team facilitates the
development and growth of the ecosystem and developer pipeline including undiluted funding,
technical onboarding and standardization conventions for ASAs, Wallets and AVM.”
192. Algorand, Inc. and the Algorand Foundation also take steps to incentivize third parties
to participate in and attract users to the ALGO protocol.  For example, in or around February 2022,
the Algorand Foundation announced a $10 million incentive for developers that can make the Algorand
blockchain compatible with applications built on the Ethereum blockchain.
193. Also in or around February 2022, the Algorand Foundation announced a section of its
website called AlgoHub, “a virtual community designed to grow the pipeline of #Algorand
developers.”
194. These statements led reasonable ALGO investors throughout the Relevant Period to
expect that the demand for ALGO would likely increase based on Algorand, Inc.’s and Algorand
Foundation’s efforts to increase demand for the Algorand technology, thereby resulting in a price
increase for ALGO.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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iv. TKN
195. In 2017, Monolith Studio, based in London, England, announced the launch of
“TokenCard,” purporting to be “the first debit card powered by smart contracts incorporating the
VISA payments network with Ethereum.”  TokenCard also created and issued the TKN token.
196. According to TokenCard’s whitepaper, TokenCard would be usable anywhere VISA
debit cards could be used, including at ATMs.  The whitepaper further explained that TokenCard
would allow users to fund their card with ether and up to five other crypto assets which users would
select.  The whitepaper noted that there would be a 1% licensing fee assessed to card swipes which
would be used to fund the TokenCard smart contract.
197. In the whitepaper, TokenCard stated that it would create a fixed number of TKN prior
to an ICO for TKN, and would not create any more TKN thereafter.  The whitepaper stated that TKN
holders would be entitled to a proportion of the licensing fees accrued by the TokenCard smart
contract.  TKN holders purportedly also received a number of benefits from the TokenCard smart
contract, including free debit card usage for TKN-backed swipes and discounted fees.
198. In 2017, TokenCard conducted an ICO of TKN and raised approximately $16.7 million
through offers and sales of TKN.  Shortly after the ICO, at some point during the period between May
2 and May 7, 2017, Bittrex first made TKN available on the Bittrex Platform.  Bittrex removed TKN
from the Bittrex Platform on or about December 8, 2017.
199. From the time of its offering and throughout the period it was listed on the Bittrex
Platform, TKN was offered and sold as an investment contract and therefore a security.
Purchasers of TKN invested money in a common enterprise.
200. TokenCard’s whitepaper stated that proceeds from the TKN sale would be pooled to
develop TokenCard’s business, noting that “[f]unds raised during the crowdsale [ICO] will be used
solely for the development and benefit of the Token platform.”  The whitepaper also stated that the
funds would be used specifically to “finance development, partnership programs, float ... operations,
regulatory and most importantly, marketing and customer acquisition.”

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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201. The price of all TKN tokens goes up or decreases together.
Investors in TKN reasonably expected to profit from the efforts of others.
202. TokenCard’s whitepaper indicated that investors could expect a direct return on their
TKN investment through the efforts of the company and its affiliates.  For example, the whitepaper
made the following statements regarding the expected growth and success of TKN:
• “TKN is designed to be the single token one might consider in order to
reap the benefits of the coming industry growth;” and
• “[W]e intend to put as much money and time into these as we possibly
can in order to maximize the value of TokenCard and TKN and dominate
this post-bank era.”
203.  The whitepaper described a mechanism called “Cash and Burn” that, functionally,
amounted to a pro-rata sharing in fees generated on the platform.  Per this mechanism:
Fees from card swipes will be assessed in the token being used to fund
the swipe.  These fees will be sent directly to the TKN Asset Contract.
Over  time,  this  contract  will  accrue  tokens  in  proportion  to  the  tokens
held and used by TokenCard customers around the world.  At any time,
a holder of TKN can “Cash and Burn” the TKN for her pro-rata share
of each token held by the TKN Asset Contract.
204. According to the whitepaper, “Cash and Burn” ensured that the TKN token would
have a market value at or above the assets contained in the TKN smart contract, noting further that if
the value dropped below those assets, “arbitrageurs will purchase TKN and burn it, yielding a
dividend.”  The whitepaper promised that through this mechanism, TKN holders would get “higher
average returns and lower volatility than they would trying to invest individually in tokens.”  The
whitepaper further described the “Cash and Burn” feature as follows:

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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v. NGC
205. NAGA Development Association Ltd. (“NAGA”) is a corporation formed in Belize in
or around October 2017, in partnership with the NAGA Group AG, a German holding company
founded in 2015 that was purportedly listed on the German Stock Exchange.
206. NGC is an ERC-20 token that NAGA issued on the Ethereum blockchain.  NAGA
claimed that “NGC is a decentralized cryptocurrency for trading and investing in financial markets,
virtual goods and cryptocurrencies.”
207. NAGA conducted what it described as a NGC “pre-sale” in or around November 2017
and an NGC “initial token sale” in or around December 2017, in which it raised approximately $25
million from more than 36,000 investors.
208. To promote its NGC token sale, NAGA issued a whitepaper to prospective investors.
In the whitepaper, NAGA described that a total of 400 million NGC tokens would be issued on the
Ethereum blockchain via a smart contract, and that this would be a “hard cap,” such that no additional
NGC would be created.  NAGA stated in the whitepaper that “issuing a token allows NAGA to be
backed by investors from all over the world who will have access to NGC right after its creation.”  It
also described its plans to be “traded on major exchanges.”
209. According to the whitepaper, 55% of the tokens were to be offered during the pre-sale
and initial token sale.  The remaining 45% were to be divided among NAGA’s team and advisors, and a
reserve pool purportedly meant to ensure sufficient liquidity and help create a market for NGC.
210. NGC was made available for trading on the Bittrex Platform from approximately May
22, 2018 through approximately June 14, 2019.
211. From the time of its offering and throughout the period it was listed on the Bittrex
Platform, NGC was offered and sold as an investment contract and therefore a security.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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Purchasers of NGC tokens invested in a common enterprise.
212. NAGA described to investors that it would pool the funds it raised in the token sales to
build and promote the NAGA ecosystem, noting it wanted investors to share in the potential profits
from the efforts it would fund with these proceeds, i.e., to “be able to participate in its future growth
through this form of funding, as compared to traditional venture funding.”
213. NAGA described in detail how the proceeds from the funds raised from investors
supposedly would be used to build its ecosystem:

214. The price of all NGC tokens goes up or decreases together.
215. NAGA’s distribution of tokens among investors and NAGA’s team and advisors
aligned their incentives in building a successful NGC platform, as any increase in NGC’s market price
would yield profits to NAGA’s team and advisors as well as other NGC investors.
Investors in NGC had a reasonable expectation of profits based on the efforts of others.
216. NAGA marketed NGC such that NGC investors reasonably expected to profit from
NAGA’s efforts to grow its platform.  NAGA’s whitepaper contained explicit statements indicating
that token holders should expect an increase in token price based on the efforts of the company in
developing the business and its “ecosystem.”

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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217. NAGA described in its whitepaper that it would work to develop the NGC platform,
thereby “building the value of the ecosystem for the benefit of long time holders and token sale
participants.”  NAGA further explained that “NGC is backed and additional NGC demand is
accelerated and generated by the multi-hundred million publicly listed NAGA AG.”  In fact, NAGA
tied the purported success of its publicly traded German partner to the success it expected to achieve
with the NGC token, positing “if [NAGA Group AG’s] stock already did 400% after three months,
what will its token do?”
218. In a section of its whitepaper entitled “Why the NAGA Initial Token Sale Will Be a
Success Story,” NAGA touted the strength of its team and resources in growing the value of the NGC
token.
219. NAGA described how the “extensive experience” of its team in developing trading
platforms would assist the growth of the platform.  NAGA also expressed its confidence that the NGC
token price would “grow exponentially,” due to its efforts at growing the number of users of its
platform.
vi. IHT
220. I-House Token or “IHT” was launched through Aladdin Fintech Company Ltd.
(“Aladdin”), an LLC formed in the Cayman Islands in or around February 2018.  Aladdin described
IHT as a “Global Real Estate Blockchain Cloud Platform” with a mission to integrate global real estate
markets with the blockchain.  The company’s whitepaper described that “[t]hrough joining blockchain
and real estate, the real estate developer, financial institutions and their users can be connected and the
transaction of real estate can be made a part of the ‘digital credit society,’” and further promised that all
“owners and investors will become beneficiaries of i-house.com real estate blockchain.”
221. Aladdin conducted an ICO of the IHT token in or around January 2018, raising
approximately $40 million.  The token was thereafter available on the Bittrex Platform from
approximately October 2, 2018 through approximately June 7, 2019.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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222. From the time of its offering and throughout the period it was listed on the Bittrex
Platform, IHT was offered and sold as an investment contract and therefore a security.
Purchasers of IHT invested money in a common enterprise.
223. The IHT whitepaper stated that the IHT platform was not yet developed and that the
proceeds from the token sale would be used to fund development of various aspects of the platform
and business.  Investor funds raised during the ICO were pooled in a designated digital wallet address
to fund the business, which included creating and supporting a platform for the IHT token, and
business development and operations.
224. Specifically, according to IHT’s Bittrex listing application, investor funds would be
pooled and used as follows:
• 10% legal fees on token sale raising
• 10% domestic and international publicity and ecological construction
• 15% existing R&D team’s operation
• 15% recruiting new R&D operators
• 50% prepaying the tokenized assets to speed up assets acquisition
225. Moreover, at least 15% of tokens would be reserved for Aladdin staff and employees
for compensation purposes or incentives.
226. The price of all IHT tokens goes up or decreases together.
Investors in IHT reasonably expected to profit from the efforts of others.
227. The whitepaper outlined a plan and timeline for development and growth of various
aspects of the supposed business model, including an official “launch event” in Hong Kong,
“Blockchain Summit Forum” marketing events in the United States and elsewhere, and global
expansion.
228. The whitepaper also highlighted the purported expertise of the team behind IHT,
including its technical and engineering expertise.  Members of the team were also marketed as experts

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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in “blockchain,” with titles such as “blockchain consultant” and “Chief Blockchain Officer” with
purportedly deep industry knowledge and experience.
229. Moreover, the whitepaper indicated that real estate developers and financial institutions
have shown “great enthusiasm” and are “willing to actively participate in the i-house.com project and
look forward to the i-house.com blockchain project IHT on-line as soon as possible.”
230. After the ICO, the company continued to make statements highlighting the efforts it
was taking to develop the business using proceeds from the token sale.  For example, in April 2018,
following a period of decline in the crypto asset market, the CEO and founder of Aladdin/I-House
reiterated IHT’s plans for expansion into global markets and noting that “[o]ur hope is that investors
will not worry about market fluctuations and continue to support IHT.  Our vision for the world’s first
real estate blockchain transaction cloud platform, is to become a leader in the blockchain industry and
to develop our own unique business model, despite market influxes.”  He concluded:  “We will
continue to work hard no matter what lies ahead to position IHT as a leader in the blockchain
industry.”  The company also offered a “reward” program that encouraged IHT investors to “lock up”
their IHT tokens and rewarded this “lock up” with additional IHT tokens.
IV. BITTREX AND BITTREX GLOBAL WERE REQUIRED TO REGISTER AS A
NATIONAL SECURITIES EXCHANGE, AND BITTREX WAS ALSO REQUIRED
TO REGISTER AS A BROKER-DEALER AND CLEARING AGENCY.
231. Throughout the Relevant Period, Bittrex, and since 2019 Bittrex and Bittrex Global,
used the means and instrumentalities of interstate commerce to bring together the orders of multiple
buyers and sellers of crypto assets that were offered and sold as securities using a trading facility
programmed with non-discretionary rules for orders to interact and buyers and sellers to agree upon the
terms of trades in these securities.  As a result, Bittrex and Bittrex Global, as a group of persons,
maintained and provided a market place for bringing together purchasers and sellers of securities.
Bittrex and Bittrex Global were therefore required to register with the Commission as a national
securities exchange or operate pursuant to an exemption to such registration, but did not do so.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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232. Throughout the Relevant Period, Bittrex used means and instrumentalities of interstate
commerce to engage in the business of effecting transactions in securities for the account of others by,
for example, soliciting potential investors in crypto asset securities, holding itself out as a place to buy
and sell crypto asset securities, facilitating trading in crypto asset securities by opening customer
accounts and handling customer funds and crypto asset securities (which it commingled and treated as
fungible) through Bittrex-controlled accounts and digital wallets, and being compensated for doing so.
Bittrex was therefore required to register with the Commission as a broker-dealer, but did not so
register.
233. Throughout the Relevant Period, Bittrex served as an intermediary in settling
transactions in crypto asset securities occurring on the Bittrex Platform.  Bittrex also acted as a
custodian of securities by allowing crypto asset securities to be deposited in Bittrex-controlled wallets,
creating a system for the central handling of securities whereby securities were treated as fungible and
customer accounts debited and credited by Bittrex to settle its customers’ transactions.  Bittrex was
therefore required to register with the Commission as a clearing agency, but did not so register.
FIRST CLAIM FOR RELIEF
Violations of Exchange Act Section 5
(Bittrex and Bittrex Global)
234. The Commission realleges and incorporates by reference here the allegations in
paragraphs 1 through 233.
235. By engaging in the acts and conduct described in this Complaint, Bittrex and Bittrex
Global together met the definition of “exchange” and, directly or indirectly, made use of the mails and
the means and instrumentalities of interstate commerce for the purpose of using any facility of an
exchange within or subject to the jurisdiction of the United States, to effect transactions in a security, or
to report any such transaction, without registering as a national securities exchange under Exchange Act
Section 6 [15 U.S.C. § 78f], and without being exempted from such registration.

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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236. By reason of the conduct described above, Bittrex and Bittrex Global, directly or
indirectly, violated, are violating, and, unless enjoined, will continue to violate Exchange Act Section 5
[15 U.S.C. § 78e].
SECOND CLAIM FOR RELIEF
Violations of Exchange Act Section 15(a)
(Bittrex)

237. The Commission realleges and incorporates by reference here the allegations in
paragraphs 1 through 233.
238. By engaging in the acts and conduct described in this Complaint, Bittrex, a person other
than a natural person under the Exchange Act, is a broker and made use of the mails and the means
and instrumentalities of interstate commerce to effect transactions in, or to induce or attempt to induce
the purchase or sale of, securities, without registering as a broker, and without being exempted from
such registration.
239. By reason of the conduct described above, Bittrex, directly or indirectly, violated, is
violating, and, unless enjoined, will continue to violate Exchange Act Section 15(a) [15 U.S.C. § 78o(a)].
THIRD CLAIM FOR RELIEF
Violations of Exchange Act Section 17A(b)
(Bittrex)

240. The Commission realleges and incorporates by reference here the allegations in
paragraphs 1 through 233.
241. By engaging in the acts and conduct described in this Complaint, Bittrex, directly or
indirectly, made use of the mails and the means and instrumentalities of interstate commerce to
perform the functions of a clearing agency with respect to securities, without registering in accordance
to Section 17A(b) of the Exchange Act and without being exempted or excluded from such
registration.
242. By reason of the conduct described above, Bittrex, directly or indirectly, violated, is
violating, and, unless enjoined, will continue to violate Exchange Act Section 17A(b) [15 U.S.C. § 78q-
1(b)].

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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FOURTH CLAIM FOR RELIEF
Violations of Exchange Act Sections 5, 15(a), and 17A(b)
(Shihara as Control Person over Bittrex)

243. The Commission realleges and incorporates by reference here the allegations in
paragraphs 1 through 233.
244. As alleged above, Bittrex violated Exchange Act Sections 5, 15(a), and 17A(b) [15
U.S.C. §§ 78e, 78o(a), 78q-1(b)].
245. Shihara was a control person of Bittrex for purposes of Exchange Act Section 20(a) [15
U.S.C. § 78t(a)] at least through November 2019.
246. At all relevant times, Shihara exercised power and control over Bittrex, including by
managing and directing Bittrex, and by directing and participating in the acts constituting Bittrex’s
violations of the securities laws.
247. By reason of the foregoing, Shihara is liable as a control person under Exchange Act
Section 20(a) [15 U.S.C. § 78t(a)] for Bittrex’s violations of Exchange Act Sections 5, 15(a), and 17A(b)
[15 U.S.C. §§ 78e, 78o(a), 78q-1(b)].  Shihara is, therefore, jointly and severally liable with and to the
same extent as Bittrex for violations of Section 5, 15(a), and Section 17A(b) of the Exchange Act.
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that the Court enter a Final Judgment:
I.
Permanently enjoining Defendants, and each of their respective agents, servants, employees,
attorneys and other persons in active concert or participation with any of them, from violating, directly
or indirectly, Section 5 of the Exchange Act [15 U.S.C. § 78e]; and Bittrex and Shihara, and each of
their respective agents, servants, employees, attorneys and other persons in active concert or
participation with any of them, from violating Sections 15(a) and 17A(b) of the Exchange Act [15
U.S.C. §§ 78o(a), 78q-1(b)];

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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II.
Ordering Defendants to disgorge on a joint and several basis all ill-gotten gains, with
prejudgment interest thereon, pursuant to Sections 20(a), 21(d)(3), 21(d)(5) and 21(d)(7) of the
Exchange Act [15 U.S.C. §§ 78u(a), 78u(d)];
III.
Prohibiting, pursuant to Section 21(d)(5) of the Exchange Act [15 U.S.C. § 78u(d)(5)], Bittrex
and Shihara from continuing to use means or instrumentalities of interstate commerce to (i) accept and
display orders in crypto asset securities from U.S. persons, (ii) act as broker or dealer with respect to
crypto asset securities, or (iii) perform the functions of  a clearing agency with respect to crypto asset
securities, without registering with the Commission; and Bittrex Global from continuing to use means
or instrumentalities of interstate commerce to accept orders in crypto asset securities from U.S.
persons;
IV.
Ordering Defendants to pay civil money penalties pursuant to Section 21(d)(3) of the Exchange
Act [15 U.S.C. § 78u(d)(3)]; and

Complaint Securities and Exchange Commission
SEC v. Bittrex, Inc., et al. New York Regional Office
Case No. 23-cv-580        100 Pearl Street, Suite 20-100
              New York, New York 10004

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V.
 Granting any other and further relief this Court may deem just and proper for the benefit of
investors.
JURY DEMAND
 The Commission demands trial by jury.
Dated: New York, New York
 April 17, 2023
      B
y: s/Jorge G. Tenreiro
      Jorge G. Tenreiro*

      By
: s/Ladan F. Stewart
Ladan F. Stewart*

By: s/Christopher J. Carney
      Christopher J. Carney*

      By: s/Ben N. Kuruvilla
      Ben N. Kuruvilla*

*Conditionally admitted pursuant to
Local Rule 83.1
SECURITIES AND EXCHANGE
COMMISSION
New York Regional Office
100 Pearl Street, Suite 20-100
New York, New York 10004
(212) 336-1100
Email: [email protected]
[email protected]
[email protected]
[email protected]

Attorneys for the Plaintiff

 Of Counsel:   David L. Hirsch
Mark R. Sylvester
Pamela Sawhney
  Daphna Waxman

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580                        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
                                   (212) 336-1100 

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UNITED STATES DISTRICT COURT 
WESTERN DISTRICT OF WASHINGTON 
SEATTLE DIVISION 
------------------------------------------------------------------------x 
SECURITIES AND EXCHANGE COMMISSION,         : 
        : 
     Plaintiff,                     : 23 Civ. 580   
         : 
   - against -                                           : ECF Case 
        :  
BITTREX, INC., BITTREX GLOBAL GMBH, and  : COMPLAINT 
WILLIAM HIROAKI SHIHARA,    : Jury Trial Demanded 
        :  
     Defendants.  :  
                   : 
------------------------------------------------------------------------x 
 

Plaintiff Securities and Exchange Commission (the “SEC” or the “Commission”), for its 

Complaint against Defendants Bittrex, Inc. (“Bittrex”), Bittrex Global GmbH (“Bittrex Global”), and 

William Hiroaki Shihara (“Shihara”), alleges as follows:  

SUMMARY 

1. Since 2014, Bittrex has operated a trading platform (the “Bittrex Platform”) through 

which U.S. customers can buy, sell, and trade crypto assets.  The assets made available on the Bittrex 

Platform include crypto asset securities.  The Bittrex Platform, like other crypto asset trading platforms, 

has merged three functions that are typically separated in traditional securities markets—those of 

broker-dealers, exchanges, and clearing agencies—despite the fact that Bittrex has never registered with 

the SEC as a broker-dealer, national securities exchange, or clearing agency.  All the while, Bittrex 

earned at least $1.3 billion in revenues from, among other things, transaction fees from investors 

(including U.S. investors) it has placed at significant risk while servicing them in these unregistered 

capacities.  

2. Congress enacted the Securities Exchange Act of 1934 (the “Exchange Act”) in part to 

provide for the regulation of the national securities markets.  And Congress charged the SEC with 

protecting investors, preserving fair and orderly markets, and facilitating capital formation, in part 

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 1 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
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through a series of registration, disclosure, recordkeeping, inspection, and anti-conflict-of-interest 

provisions.  These regulatory provisions have led, in turn, to the separation of key functions related to 

securities transactions—including those carried out by brokers, exchanges, and clearing agencies—in 

part to better protect investors and their assets from conflicts of interest.  By collapsing these functions 

into a single platform and failing to register with the SEC as to any of the three functions, and not 

having obtained any applicable exemptions from registration, Bittrex has for years defied the regulatory 

structures and evaded the disclosure requirements that Congress and the SEC have over the course of 

decades constructed for the protection of the national securities markets and investors. 

3. Since it launched the Bittrex Platform, Bittrex has been operating as an unregistered 

broker (including by soliciting potential investors, handling customer funds and assets, and charging a 

fee for these services) and an unregistered clearing agency (including by holding its customers’ assets in 

Bittrex-controlled wallets and settling its customers’ transactions by debiting and crediting the relevant 

customer accounts).  In addition, since the launch of the Bittrex Platform, Bittrex and, since 2019, its 

foreign affiliate Bittrex Global, acting in concert, have operated the Bittrex Platform as an unregistered 

exchange by providing a market place that, among other things, brings together orders of multiple 

buyers and sellers of crypto assets and matches and executes those orders.   

4. Bittrex has carried out these functions despite the fact that the crypto assets it has made 

available for trading on the Bittrex Platform have included crypto asset securities.  For years, Bittrex 

made calculated business decisions to make assets available on the Bittrex Platform in order to increase 

its own revenues, which are primarily based on trading fees from customers, while explicitly 

acknowledging that its conduct could invite regulatory scrutiny.  Bittrex’s strategy has been to elevate 

increasing its profits over complying with the regulatory framework for securities markets.   

5. An important part of this long-running strategy has been Bittrex’s coordinated 

campaign, going back to 2017, to direct issuers of crypto assets to “scrub” their public statements of 

any language that could raise questions from the SEC as to whether these crypto assets were offered 

and sold as securities, while allowing those securities to be traded on its platform.  Bittrex’s coordinated 

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Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 3 -                            (212) 336-1100 

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“problematic statement cleanup” campaign was designed to attempt to conceal the true nature of the 

offerings from the public and regulators.   

6. This campaign included Bittrex directing certain issuers of crypto asset securities that 

Bittrex wanted to make available on the Bittrex Platform to first purge public statements of 

“investment-related terms” that Bittrex understood could make a crypto asset subject to regulation as a 

crypto asset security under the Supreme Court’s decision in SEC v. W.J. Howey Co., 328 U.S. 293 (1946) 

and well-established principles of the U.S. federal securities laws.  In other words, Bittrex knew what 

statements to ask issuers to “scrub” because it understood the test to determine whether a crypto asset 

was being offered and sold as a security. 

7. From the launch of the Bittrex Platform in 2014 until late 2019, when he stepped down 

as CEO, Shihara directed Bittrex’s operations and activities.  Specifically, Shihara led decisions 

regarding which crypto assets to make available for trading on the Bittrex Platform and directed 

Bittrex’s “problematic statement cleanup” campaign.  Like Bittrex, Shihara—who was acutely aware of 

potential SEC scrutiny of these activities—was financially motivated to make more assets available for 

trading on the Bittrex Platform in order to increase Bittrex’s revenues and, in turn, his own 

compensation, which totaled at least $130 million. 

8. Defendants placed their own financial interests ahead of the interests of the investing 

public by failing to comply with the legal requirement that they participate as regulated intermediaries 

with concomitant obligations to their customers, including important disclosure and review obligations 

designed to protect investors and promote the proper functioning of our capital markets.  In so doing, 

and because Defendants neither sought nor obtained any applicable exemptions from registration, 

Defendants have violated the registration provisions of the Exchange Act applicable to brokers, 

exchanges, and clearing agencies.  

  

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 3 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 4 -                            (212) 336-1100 

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VIOLATIONS 

9. By engaging in the conduct set forth in this Complaint, Bittrex and Bittrex Global have 

acted as an exchange, and Bittrex has acted as a broker and clearing agency, without registering as an 

exchange, broker-dealer, or clearing agency, in violation of Exchange Act Sections 5, 15(a), and 17A(b) 

[15 U.S.C. §§ 78e, 78o(a), 78q-1(b)], respectively.  Shihara has violated Exchange Act Sections 5, 15(a), 

and 17A(b) [15 U.S.C. §§ 78e, 78o(a), 78q-1(b)] as a control person over Bittrex under Exchange Act 

Section 20(a) [15 U.S.C. § 78t(a)]. 

10. Unless Defendants are permanently restrained and enjoined, there is a reasonable 

likelihood that they will continue to engage in the acts, practices, and courses of business set forth in 

this Complaint and in acts, practices, and courses of business of similar type and object in violation of 

the federal securities laws. 

NATURE OF THE PROCEEDING AND RELIEF SOUGHT 

11. The Commission brings this action pursuant to the authority conferred upon it by 

Exchange Act Section 21(d) [15 U.S.C. § 78u(d)]. 

12. The Commission seeks a final judgment: (a) pursuant to Exchange Act Section 21(d)(1) 

[15 U.S.C. § 78u(d)(1)], permanently enjoining Defendants from violating Exchange Act Section 5, and 

Bittrex and Shihara from violating Exchange Act Sections 15(a) and 17A(b); (b) pursuant to Sections 

21(d)(3), (5), and (7) of the Exchange Act, (i) ordering Defendants to disgorge their ill-gotten gains and 

to pay prejudgment interest thereon on a joint and several basis; (ii) prohibiting Bittrex and Shihara 

from continuing to use means or instrumentalities of interstate commerce to accept and display orders 

in crypto asset securities from U.S. persons, act as broker or dealer with respect to crypto asset 

securities, or perform the functions of a clearing agency with respect to crypto asset securities, without 

registering with the SEC; and Bittrex Global from continuing to use means or instrumentalities of 

interstate commerce to accept orders in crypto asset securities from U.S. persons, without registering 

with the SEC; and (iii) imposing civil money penalties on Defendants. 

  

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 4 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 5 -                            (212) 336-1100 

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JURISDICTION AND VENUE 

13. This Court has jurisdiction over this action pursuant to Exchange Act Section 21(d) [15 

U.S.C. § 78u(d)]. 

14. Defendants, directly or indirectly, have made use of the means or instrumentalities of 

transportation or communication in interstate commerce or of the mails in connection with the 

transactions, acts, practices, and courses of business alleged herein.   

15. Venue is proper in the Western District of Washington pursuant to Exchange Act 

Section 27(a) [15 U.S.C. § 78aa(a)].  Bittrex is headquartered in this District and conducts its operations 

from this District, Bittrex personnel provide services to Bittrex Global from this District, including 

maintaining technology shared by Bittrex and Bittrex Global, and Shihara resides in this District.  

DEFENDANTS 

16. Bittrex is a Delaware corporation founded in 2014 with its principal place of business 

in Seattle, Washington.  Bittrex has operated a crypto asset trading platform servicing U.S. customers 

since 2014.  Bittrex is a subsidiary of Aquila Holdings, Inc., a Delaware corporation.  On or around 

March 31, 2023, Bittrex announced that it would be winding down its operations in the United States 

effective April 30, 2023.  As part of the wind down process, customers were permitted to trade crypto 

assets, including crypto asset securities, through April 14, 2023, and will be permitted to withdraw fiat 

funds and crypto assets, including crypto asset securities, through April 27, 2023 and April 29, 2023, 

respectively.   

17. Bittrex Global is a limited liability company organized under the laws of Liechtenstein.  

In 2019, Bittrex Global launched a crypto asset trading platform that purports to prohibit U.S. 

customers.  Like Bittrex, Bittrex Global is a subsidiary of Aquila Holdings, Inc.  Bittrex personnel in the 

United States provide a variety of services to Bittrex Global pursuant to service agreements between 

Bittrex and Bittrex Global.  Bittrex also provides Bittrex Global with the technology to operate its 

trading platform, including a single matching engine and order book that Bittrex Global shares with 

Bittrex, both of which are maintained by Bittrex personnel in the United States.   

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 5 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 6 -                            (212) 336-1100 

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18. Shihara, a resident of Redmond, Washington, co-founded Bittrex in 2014 and served as 

its CEO until approximately November 2019.  Shihara was a member of Bittrex’s board of directors 

from at least 2016 through at least August 2020, and the chair of Bittrex’s “Token Review Committee” 

(discussed in Section III.A below) from 2017 to approximately November 2019.  During his time as 

CEO, Shihara was responsible for the day-to-day operation and management of Bittrex, including the 

hiring and management of employees and outside advisors including attorneys, and was also 

responsible for financing activities.  Shihara was also involved in creating Bittrex’s website, from which 

the Bittrex Platform is accessed by customers. 

STATUTORY AND LEGAL FRAMEWORK 

What Is a “Security”? 

19. The Exchange Act defines “security” to include a wide range of assets, including 

“investment contracts.”   

20. Investment contracts are instruments through which a person invests money in a 

common enterprise and reasonably expects profits or returns derived from the entrepreneurial or 

managerial efforts of others.  As the U.S. Supreme Court noted in Howey, Congress defined “security” 

broadly to embody a “flexible rather than a static principle, one that is capable of adaptation to meet 

the countless and variable schemes devised by those who seek the use of the money of others on the 

promise of profits.”  328 U.S. at 299.  Courts have found a variety of novel or unique investment 

vehicles constituted investment contracts, including those involving interests in orange groves, animal 

breeding programs, cattle embryos, mobile phones, enterprises that exist only on the Internet, and 

certain crypto assets (which crypto asset market participants at times also label “cryptocurrencies”). 

The Exchange Act Includes Important Registration Requirements to Regulate and 
Control Transactions in the Securities Markets. 

21. The Exchange Act governs how securities are transacted in the U.S. securities markets 

and imposes obligations on how various intermediaries, including broker-dealers, exchanges, and 

clearing agencies, operate in those markets, to protect investors who transact in those markets. 

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Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 7 -                            (212) 336-1100 

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22. To fulfill the purposes of the Exchange Act, Congress enacted a regime that requires 

registration of, and imposes disclosure obligations on, certain defined participants in the national 

securities markets, including but not limited to securities exchanges, brokers and dealers, nationally 

recognized statistical ratings associations, security-based swap dealers, self-regulatory organizations, and 

clearing agencies, and subjects those participants to SEC and other rules governing their activities.      

23. As Section 2 of the Exchange Act [15 U.S.C. § 78b] explains, in enacting the Exchange 

Act, Congress found that those obligations are essential to the proper functioning of the national 

securities markets and the national economy:   

[T]ransactions in securities as commonly conducted upon securities 
exchanges and over-the-counter markets are effected with a national 
public interest which makes it necessary to provide for regulation and 
control of such transactions and of practices and matters related thereto 
… [to] perfect the mechanisms of a national market system for securities 
and a national system for the clearance and settlement of securities 
transactions and the safeguarding of securities and funds related thereto, 
and to impose requirements necessary to make such regulation and 
control reasonably complete and effective, in order to protect interstate 
commerce, the national credit, the Federal taxing power, to protect and 
make more effective the national banking system and Federal Reserve 
System, and to insure the maintenance of fair and honest markets in such 
transactions. 

24. Congress also determined that “[t]he prompt and accurate clearance and settlement of 

securities transactions, including the transfer of record ownership and the safeguarding of securities and 

funds related thereto, are necessary for the protection of investors and persons facilitating transactions 

by and acting on behalf of investors.”  15 U.S.C. § 78q-1. 

Registration of Exchanges: 

25. In enacting registration provisions for national securities exchanges, Congress found in 

Section 2(3) of the Exchange Act [15 U.S.C. §78b(3)] that: 

Frequently the prices of securities on such exchanges and markets are 
susceptible to manipulation and control, and the dissemination of such 
prices gives rise to excessive speculation, resulting in sudden and 
unreasonable fluctuations in the prices of securities which (a) cause 
alternately unreasonable expansion and unreasonable contraction of the 
volume of credit available for trade, transportation, and industry in 
interstate commerce, (b) hinder the proper appraisal of the value of 

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Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
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securities and thus prevent a fair calculation of taxes owing to the United 
States and to the several States by owners, buyers, and sellers  of securities, 
and (c) prevent the fair valuation of collateral for bank loans and/or 
obstruct the effective operation of the national banking system and 
Federal Reserve System.  

26. Accordingly, Section 5 of the Exchange Act [15 U.S.C. § 78e] requires an organization, 

association, or group of persons that meets the definition of “exchange” under Section 3(a)(1) of the 

Exchange Act, unless otherwise exempt, to register with the Commission as a national securities 

exchange pursuant to Section 6 of the Exchange Act.   

27. Section 3(a)(1) of the Exchange Act [15 U.S.C. § 78c(a)(1)] defines “exchange” to mean 

“any organization, association, or group of persons, whether incorporated or unincorporated, which 

constitutes, maintains, or provides a market place or facilities for bringing together purchasers and 

sellers of securities or for otherwise performing with respect to securities the functions commonly 

performed by a stock exchange as that term is generally understood, and includes the market place and 

the market facilities maintained by such exchange.”  

28. Exchange Act Rule 3b-16(a) [17 C.F.R. § 240.3b-16(a)] defines certain terms in the 

definition of “exchange” under Section 3(a)(1) of the Exchange Act, including “[a]n organization, 

association, or group of persons,” as one that: “(1) [b]rings together the orders for securities of multiple 

buyers and sellers; and (2) [u]ses established, non-discretionary methods (whether by providing a 

trading facility or by setting rules) under which such orders interact with each other, and the buyers and 

sellers entering such orders agree to the terms of a trade.”  Exchange Act Rule 3b-16(b) excludes 

certain systems from Exchange Act Rule 3b-16(a).     

29. A system that meets the criteria of Exchange Act Rule 3b-16(a) and is not excluded 

under Exchange Act Rule 3b-16(b) must register, pursuant to Section 5 of the Exchange Act, as a 

national securities exchange under Section 6 of the Exchange Act or operate pursuant to an appropriate 

exemption. 

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Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 9 -                            (212) 336-1100 

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30. Registration of a trading platform as an “exchange” under the Exchange Act is a 

bedrock Congressional enactment that permits the SEC to carry out its role of oversight over the 

national securities markets.   

31. Exchanges properly registered as such under the Exchange Act must enact a set of rules 

to govern their and their members’ behavior, and these rules are subject to review by the SEC under 

Section 19 of the Exchange Act [15 U.S.C. § 78s].  This review process is designed to ensure that each 

of these securities marketplaces continues to operate in a manner consistent with the Exchange Act as 

its practices and procedures evolve over time, in part to protect investors and the integrity of securities 

markets that affect national commerce and the economy.   

Registration of Broker-Dealers: 

32. Section 15(a) of the Exchange Act [15 U.S.C. § 78o(a)] generally requires brokers and 

dealers to register with the SEC, and brokers and dealers must also join “self-regulatory organizations” 

(“SROs”) as members.  SROs require members to adhere to rules governing their activities. 

33. Section 3(a)(4) of the Exchange Act [15 U.S.C. § 78c(a)(4)] defines “broker” as “any 

person engaged in the business of effecting transactions in securities for the account of others.” 

34. The regulatory regime applicable to broker-dealers is a cornerstone of the U.S. federal 

securities laws and provides important safeguards to investors and market participants.  Registered 

broker-dealers are subject to comprehensive regulation under the Exchange Act and under the rules of 

each SRO of which the broker-dealer is a member.  These regulations and rules include recordkeeping 

and reporting obligations, Commission and SRO examination, and general and specific requirements 

aimed at addressing certain conflicts of interest, among other things.  All of these rules and regulations 

are critical to the soundness of the national securities markets and to protecting public investors who 

interact with broker-dealers when transacting in securities on regulated exchanges. 

35. To preserve fair and orderly markets, avoid conflicts of interests, and protect investors, 

Section 11(a) of the Exchange Act [15 U.S.C. § 78k(a)] generally prohibits broker-dealers that are 

members of exchanges from effecting transactions on that exchange for their own accounts. 

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Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 10 -                            (212) 336-1100 

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Registration of Clearing Agencies: 

36. Section 17A(b) of the Exchange Act [15 U.S.C. § 78q-1(b)] generally makes it unlawful 

“for any clearing agency, unless registered in accordance with this subsection, directly or indirectly, to 

make use of the mails or any means or instrumentality of interstate commerce to perform the functions 

of a clearing agency with respect to any security.” 

37. Section 3(a)(23)(A) of the Exchange Act [15 U.S.C. § 78c(a)(23)(A)] defines the term 

“clearing agency” as “any person who acts as an intermediary in making payments or deliveries or both 

in connection with transactions in securities or who provides facilities for comparison of data 

respecting the terms of settlement of securities transactions, to reduce the number of settlements of 

securities transactions, or for the allocation of securities settlement responsibilities,” as well as “any 

person … who (i) acts as a custodian of securities in connection with a system for the central handling 

of securities whereby all securities of a particular class or series of any issuer deposited within the 

system are treated as fungible and may be transferred, loaned, or pledged by bookkeeping entry without 

physical delivery of securities certificates, or (ii) otherwise permits or facilitates the settlement of 

securities transactions or the hypothecation or lending of securities without physical delivery of 

securities certificates.” 

38. The regulatory regime applicable to clearing agencies provides important safeguards to 

investors and market participants.  Registered clearing agencies are subject to comprehensive regulation 

under the Exchange Act and the rules thereunder.  These regulations and rules include recordkeeping 

obligations and require SEC examination.  Clearing agencies properly registered as such under the 

Exchange Act must enact a set of rules to govern their and their members’ behavior, and these rules are 

subject to review by the SEC.  All of these rules and regulations are critical to the protection of 

investors, the safeguarding of securities and funds, and the maintenance of fair competition. 

  

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Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 11 -                            (212) 336-1100 

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Registration of Exchanges, Broker-Dealers, and Clearing Agencies Is Essential to the 
Proper Functioning of the U.S. Securities Markets. 

39. In traditional national securities markets such as those for equity securities, the 

functions described above—those of “exchanges,” “broker-dealers,” and “clearing agencies”—have 

been carried out by separate legal entities that are independently registered (or exempt from 

registration) and regulated by the SEC.  Separation of these core functions aims to minimize conflicts 

between the interests of securities intermediaries and investors.  Registration provides the means for the 

SEC to understand the business of the securities intermediaries and their relationship with investors in 

order to protect those investors and the securities markets, and to prevent fraud or other abuses. 

40. Investors in traditional national securities markets do not generally trade directly with 

national securities exchanges or clearing agencies but instead are customers of broker-dealers.  Only 

broker-dealers (or natural persons associated with a broker-dealer) may become members of a national 

securities exchange.  In addition, broker-dealers who have customers must become members of the 

Financial Industry Regulatory Authority (“FINRA”), an SRO that imposes its own set of rules and 

oversight over broker-dealers, particularly with regard to protecting retail investors. 

41. National securities exchanges and clearing agencies must be approved for registration by 

the SEC, become SROs, and subject all of their proposed rules and changes to those rules to review by 

the Commission.    

42. As noted, the Exchange Act also subjects registered intermediaries to important record 

keeping and inspection requirements.  For example, Section 17 of the Exchange Act [15 U.S.C. § 78q] 

requires registered exchanges, broker-dealers, and clearing agencies to make and keep records as the 

SEC prescribes by rule, and subject those records to reasonable periodic, special, or other examinations 

by representatives of the SEC. 

43. These provisions ensure fair and orderly markets to protect investors, and provide for 

oversight over the national securities markets, given the importance of these markets to the economic 

health of the nation.  These provisions also seek to ensure, among other things, that investors’ 

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Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 12 -                            (212) 336-1100 

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securities orders are handled fairly and transparently, that securities transactions result in settlement 

finality, and that investors’ assets are protected and can be recovered if necessary.  They are also aimed 

at ensuring that the SEC and investors have a robust level of disclosures and protections against fraud 

and conflicts of interest, and they make securities market intermediaries subject to rigorous external 

oversight, regulatory exams, independent auditing, and other review and examination functions. 

BACKGROUND ON CRYPTO ASSETS AND CRYPTO TRADING PLATFORMS 

What Is a “Crypto Asset”? 

44. As used herein, the terms “crypto asset,” “digital asset,” or “digital token” generally 

refer to an asset issued and/or transferred using blockchain or distributed ledger technology, including 

assets sometimes referred to colloquially as “cryptocurrencies,” “virtual currencies,” digital “coins,” and 

digital “tokens.”   

45. A blockchain or distributed ledger is a peer-to-peer database spread across a network of 

computers that records transactions in theoretically unchangeable, digitally recorded data packages, 

referred to as “blocks.”  These systems typically rely on cryptographic techniques for secure recording 

of transactions. 

46. Some crypto assets may be “native tokens” to a particular blockchain—meaning that 

they are represented on their own blockchain—though other crypto assets may also be represented on 

that same blockchain.  Like other crypto assets, native tokens may also be sold and traded for 

consideration. 

Consensus Mechanisms and Validation of Transactions on a Blockchain 

47. Blockchains typically employ a “consensus” mechanism that, among other things, aims 

to achieve agreement among the blockchain’s network of computers as to a data value or on the state 

of the ledger. 

48. A consensus mechanism describes the particular protocol used by a blockchain to agree 

on, among other things, which ledger transactions are valid, to update the blockchain, and potentially to 

compensate certain participants including with additional crypto assets.  There can be multiple sources 

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Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 13 -                            (212) 336-1100 

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for the compensation under the terms of the blockchain protocol, including from fees charged to those 

transacting on the blockchain, or through the creation or “minting” of additional amounts of the 

blockchain’s native crypto asset through the validation of transactions (which may dilute the value of 

the existing tokens).   

49. “Proof of work” and “proof of stake” describe the two major “consensus mechanisms” 

used by blockchains.  Proof of work, the consensus mechanism used by the Bitcoin blockchain, 

involves computers, or validator nodes, attempting to “mine” a “block” of transactions, in part, by 

guessing a pre-determined number.  The first miner to successfully guess this number earns the right to 

update the blockchain and to be rewarded with the blockchain’s native crypto asset (e.g., for the Bitcoin 

blockchain, the reward is in bitcoin).  Proof of stake, the consensus mechanism currently used on 

Ethereum, involves selecting block validators from crypto asset holders who have committed or 

“staked” a minimum number of crypto assets as part of the validation process.  On Ethereum, rewards 

are earned in the blockchain’s native crypto asset, ether. 

The Offer and Sale of Crypto Assets 

50. Persons have offered and sold crypto assets in fundraising events in exchange for 

consideration, including but not limited to through “initial coin offerings” or “ICOs,” “crowdsales,” or 

public “token sales.”  In some instances, the entities offering or selling the crypto assets may release a 

“whitepaper” or other marketing materials describing a project to which the asset relates, the terms of 

the issuance, and any rights associated with the asset.   

51. Some issuers continue to sell the crypto assets after the initial offer and sale, and in 

some offerings the asset may also be obtained by purchasing it on secondary markets, including but not 

limited to crypto asset trading platforms. 

Crypto Asset Trading Platforms 

52. Generally speaking, crypto asset trading platforms—like the Bittrex Platform, which is 

described in more detail below—are marketplaces that offer a variety of services relating to crypto 

assets, often including brokerage, trading, and settlement.  

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Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 14 -                            (212) 336-1100 

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53. Crypto asset trading platforms allow their customers to exchange crypto assets for fiat 

currency (legal tender issued by a country, like U.S. Dollars) or to trade certain crypto assets for other 

crypto assets.  “Off-chain” transactions are those where the trades are tracked in the internal 

recordkeeping mechanisms of the platform, while “on-chain” transactions are those where the crypto 

asset is transferred from one blockchain address to another. 

54. Crypto asset trading platforms typically require customers to deposit with the platform 

in advance any crypto assets they will seek to sell there, frequently resulting in the platform possessing 

and controlling such assets as the legal owner and thus functioning as a central securities depository. 

The customers’ crypto assets are then typically tracked and maintained on internal ledgers maintained 

by the crypto asset trading platforms, which typically have no legal obligation to segregate a particular 

customer’s crypto assets at a separate blockchain address.  

55. The graphic user interfaces employed by crypto asset trading platforms—on websites, 

apps, or other software—typically emulate and function like traditional securities trading screens:  They 

show order books of the various assets available to trade, as well as historical trading information (such 

as high and low prices on the platform, trading volumes, and market capitalizations).  

56. However, unlike in traditional securities markets, crypto asset trading platforms 

(including the Bittrex Platform, as more fully described below) typically solicit, accept, and handle 

customer orders for securities; allow for the interaction and intermediation of multiple bids and offers 

resulting in purchases and sales; act as an intermediary in making payments or deliveries, or both; and 

maintain a central securities depository for the settlement of securities transactions. 

57. By contrast, investors participate on registered national securities exchanges through 

broker-dealer intermediaries.  The exchange sends executed trades to a registered clearing agency that 

takes responsibility for ensuring participants’ collective safekeeping of securities and settlement finality 

among those participants and, in doing so, protects investors’ beneficial interests.  Thus, registered 

national securities exchanges typically do not assume possession or control of the underlying assets 

being traded.  By contrast, crypto asset trading platforms also usually settle transactions by updating 

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 14 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 15 -                            (212) 336-1100 

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their internal records with each investor’s positions, a function that is typically carried out in the 

traditional securities markets by clearing agencies—not by the exchanges.   

58. Likewise, crypto asset trading platforms typically perform roles traditionally assigned to 

broker-dealers in traditional securities markets, without following or even recognizing the legal 

obligations and restrictions on activities that accompany status as a broker-dealer.  For example, 

unregistered and non-compliant crypto asset trading platforms often do not adequately disclose the risk 

that they have the ability and financial incentive to trade crypto asset securities against their own 

customers, which could put their customers on the losing side of each trade. 

59.   By functioning in roles similar to traditional intermediaries like broker-dealers—but 

without registering in those capacities and thereby failing to adhere to their concomitant duties and 

obligations to investors—crypto asset trading platforms like the Bittrex Platform harm the interests of 

the investing public.  

60. For example, a registered national securities exchange is required to have detailed and 

transparent standards and procedures for listing and delisting a security.  These rules are designed, 

among other reasons, to provide an issuer in danger of falling below the listing standards with 

reasonable notice of the potential delisting and an opportunity to remedy the defect.  In addition, a 

number of rules are designed to ensure that actual and potential delistings are made known to the 

public, so that investors have material information about the businesses in which they invest. 

61. By contrast, a crypto asset platform that fails to register in any capacity declares itself 

free from any obligation to follow those provisions in the Exchange Act, including the types of rules 

described above, that are designed to protect investors, promote the public interest, and provide 

truthful and material information to investors.  As a result, investors are at the whim of the crypto asset 

platform to give them information about their standards and procedures for listing (and de-listing) 

investments, about the investments themselves, including whether any particular listed crypto asset may 

potentially be delisted, and the platform’s operations.  

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 15 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 16 -                            (212) 336-1100 

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62. A private conversation in or around June 2017 between a Bittrex employee and one of 

Bittrex’s three founders illustrates the type of investor harm that can result from a crypto asset platform 

failing to follow or even recognize these obligations.  The employee complained to the founder:  “I hate 

people bitching that we don’t email them about market removals…I LOST SO MUCH CAUSE I 

DIDn’T KNOW.”  The founder responded that his preferred response to those investors was “go f*** 

yourself” or at a minimum to tell them to “track your own damn investment or get a broker to do it for 

you.” 

The DAO Report 

63. On July 25, 2017, the SEC issued the Report of Investigation Pursuant to Section 21(a) of the 

Securities Exchange Act of 1934: The DAO (the “DAO Report”), advising “those who would use … 

distributed ledger or blockchain-enabled means for capital raising[] to take appropriate steps to ensure 

compliance with the U.S. federal securities laws,” and finding that the offering of crypto assets at issue 

in the DAO Report were offerings of investment contracts and, therefore, of securities. 

64. The DAO Report also advised that “any entity or person engaging in the activities of an 

exchange must register as a national securities exchange or operate pursuant to an exemption from such 

registration,” and “stress[ed] the obligation to comply with the registration provisions of the federal 

securities laws with respect to products and platforms involving emerging technologies and new 

investor interfaces.”  The DAO Report also found that the trading platforms at issue there “provided 

users with an electronic system that matched orders from multiple parties to buy and sell [the crypto 

asset securities at issue] for execution based on non-discretionary methods” and therefore “appear to 

have satisfied the criteria” for being an exchange under the Exchange Act. 

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Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 17 -                            (212) 336-1100 

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FACTS 

I. THE BITTREX PLATFORM 

65. Bittrex was founded in 2014 by Shihara and two other individuals.  Shihara served as 

Bittrex’s CEO from the time of its founding until late 2019, and as a member of Bittrex’s board of 

directors from at least 2016 through at least August 2020.  Bittrex is headquartered in Seattle, 

Washington and, at its peak, had approximately 300 employees.  

66. In 2014, Bittrex launched the Bittrex Platform, an online platform that allows customers 

to buy, sell, and trade certain crypto assets.  On its website, Bittrex describes the Bittrex Platform as a 

“digital currency exchange offering spot market trades between many digital currency and fiat markets” 

and as a “crypto exchange for the future.”  

67. From 2014 to the present (the “Relevant Period”), the Bittrex Platform made available 

more than 300 crypto assets for trading.   

68. Through Bittrex’s website, customers could open accounts, deposit funds and crypto 

assets, enter orders, and trade crypto assets 24 hours a day, seven days a week.  Customers could also 

trade crypto assets through mobile trading applications and Bittrex’s application programming interface 

or “API” (a software intermediary permitting two different computer programs to communicate).   

69. During the Relevant Period, the Bittrex Platform was available to both retail and 

institutional customers, including U.S. residents.  Institutional customers enjoyed additional “trading 

benefits” such as unlimited withdrawals, instant ability to engage in fiat trading, expedited credit for 

deposits, priority support, and additional API integration functionality.   

70. From 2017 to 2022, Bittrex earned more than $1.3 billion in revenues from transaction 

fees charged to customers for these crypto asset trading and related services.  From these revenues, 

Shihara was paid at least $130 million in bonuses and profit distributions. 

71. As noted above, Bittrex has announced plans to wind down its operations in the United 

States effective April 30, 2023.   

  

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Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 18 -                            (212) 336-1100 

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II. THROUGH THE BITTREX PLATFORM, BITTREX AND BITTREX GLOBAL 
PROVIDE EXCHANGE SERVICES TO U.S. CUSTOMERS, AND BITTREX ALSO 
PROVIDES BROKERAGE AND CLEARING SERVICES TO U.S. CUSTOMERS. 

72. Neither Bittrex nor Bittrex Global has ever registered with the Commission as a 

national securities exchange, and Bittrex has never registered with the Commission as a broker-dealer or 

clearing agency.  No exemption from registration applies to either Bittrex or Bittrex Global.  

Nonetheless, throughout the Relevant Period, Bittrex (along with Bittrex Global starting in 2019) has 

acted as an exchange, and Bittrex has also acted as a broker and clearing agency, including through the 

following conduct: 

A. Bittrex Solicits Customers. 

73. During the Relevant Period, Bittrex regularly solicited customers to open accounts at 

Bittrex and access the Bittrex Platform, including through posts on Bittrex’s website and on social 

media. 

74. For example, Bittrex posted on Twitter information about crypto assets available to 

trade on the Bittrex Platform, trading features of the Bittrex Platform, and links to Bittrex product 

announcements. 

75. Moreover, certain Bittrex personnel regularly posted about Bittrex on their personal 

Twitter accounts, including re-tweeting information published on Bittrex’s Twitter handle. 

76. Bittrex regularly posted comments in the Bittrex forum on the social media platform 

Reddit, including posts or comments referring customers to Bittrex’s trading support services and 

providing updates about the status of the Bittrex Platform. 

77. Bittrex has also marketed monetary incentives and promotions aimed at attracting more 

investors to the Bittrex Platform.  For example, in or around March 2020, Bittrex launched the “Bittrex 

Referral Program,” which “rewards” existing Bittrex customers who refer new customers to Bittrex by 

allowing them to “earn 10% on all commissions of the quote currency from every trade made” by the 

customer they referred.  In addition, as recently as the fourth quarter of 2022, Bittrex launched a “New 

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Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 19 -                            (212) 336-1100 

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User Reward Program,” which provided a “$10 sign up bonus” to be paid to referrers with respect to 

new customers. 

B. Bittrex Holds and Controls Customers’ Funds and Crypto Assets. 

78. During the Relevant Period, Bittrex required that its customers, before placing orders to 

buy or sell crypto assets, transfer their crypto assets into digital wallets and their funds into bank 

accounts, both controlled by Bittrex.  Specifically, to deposit crypto assets into a Bittrex trading 

account, customers must transfer their crypto assets from an existing digital wallet to a Bittrex-

controlled digital wallet.  Similarly, to deposit fiat currency into a Bittrex trading account, customers 

must make a deposit to a Bittrex-controlled bank account using a wire transfer, bank transfer, or other 

means.   

79. Certain “terms of service” available on Bittrex’s website during the Relevant Period 

informed customers that “Bittrex controls the private keys for the blockchain addresses for deposited” 

crypto assets and that customers may not “claim ownership of any particular [crypto asset] based on the 

blockchain address, blockchain transfer record or other basis” because they have “authorize[d] Bittrex 

to take temporary control of” the crypto assets.1   

80. The terms of service also stated that customers’ crypto assets and fiat currency “are 

tracked and maintained on internal ledgers maintained by Bittrex” and that “Bittrex has no obligation to 

segregate [a particular user’s] fiat currency in a separate bank account or to segregate any of [a particular 

user’s crypto assets] at a separate blockchain address.”  The terms of service further stated that “[f]iat 

currency and [crypto assets] are fungible with other like fiat currency and [crypto assets], and, to the 

extent [customers] are entitled to withdraw or otherwise receive any funds or [crypto assets], [they] are 

entitled to a quantity of fiat currency or [crypto assets] but not any particular fiat currency or [crypto 

assets].”  

                                                 
1 A “private key” is a password known only to the person who controls a crypto asset, which is tied to 
the “address” (a long string of letters and numbers on the blockchain, similar to a bank account 
number) with which the crypto asset is associated. 

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Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 20 -                            (212) 336-1100 

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C. Through the Bittrex Platform, Bittrex and Bittrex Global Together Maintain and 
Provide a Marketplace for Trading Crypto Assets. 

81. According to Bittrex’s website, the Bittrex Platform provides a “custom-built trading 

engine” (also known as a matching engine) that ensures customer “orders are executed in real-time.”   

82. Customers could trade during the Relevant Period crypto asset “pairs,” which consist of 

both a base asset and a quote asset, where the base asset is quoted in terms of the value of the quote 

asset in the trading pair.  For example, for the trading pair “BTC-USD,” the base asset, bitcoin, is 

quoted in U.S. Dollars.   

83. During the Relevant Period, Bittrex maintained individual order books for each trading 

pair, which all customers could access via the Bittrex Platform or its API.  All order books resided on a 

centralized server maintained by Bittrex.  As discussed below, during the Relevant Period, Bittrex and 

Bittrex Global shared a single order book (for those trading pairs that are available on both the Bittrex 

Platform and the Bittrex Global platform) and matching engine.   

84. As demonstrated below, the design and functionality of the Bittrex Platform is similar to 

those of properly registered national securities exchanges, including its (i) display and order book, (ii) 

order entry and order types, and (iii) order matching and trading rules. 

i. Display and Order Book 

85. Bittrex’s website (www.bittrex.com) provides a user-friendly interface for trading crypto 

assets on the Bittrex Platform.  The Bittrex Platform displays current and historical pricing information 

and other information relevant for trading crypto assets that is akin to what users see on traditional 

securities platforms.   

86. A tab or link on the Bittrex website called “Markets” leads customers to a page listing 

the hundreds of crypto asset trading pairs available for trading on the Bittrex Platform.  This page 

provides customers with the current price for the base asset of each trading pair in terms of the quote 

asset, the estimated USD value of the quoted asset, the high and low price for each trading pair over 

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Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 21 -                            (212) 336-1100 

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the previous 24 hours, the percentage change in price during that same period, and the total value of all 

trading of that crypto asset trading pair that occurred over that period. 

87. The crypto assets listed on the “Markets” page appear by full name and ticker symbol 

and are displayed in descending order from largest to smallest based on the previous 24-hour trading 

volume.  The “Markets” page also displays approximately five crypto asset trading pairs under the 

category of “trending”; these are the trading pairs that have had the highest volume of trading over the 

previous 24 hours and/or the highest percentage of gains or losses in value over that same period. 

88. Another link on the Bittrex Platform website called “Trade” leads customers to the 

order books for the crypto asset trading pairs available for trading on the Bittrex Platform.  One side of 

the order book displays the current buy orders in descending order from highest bid price to lowest, 

while the other side of the order book displays the sell orders in ascending order from lowest asking 

price to the highest.   

89. The “Trade” page also displays charts showing the platform’s trading volume in a 

selected crypto asset over specified periods of time (i.e., 1 day, 5 days, 1 month, etc.), last-sale prices, 

open orders, and the platform’s computation of the current mid-market price in that asset (i.e., the 

middle point between the highest bid and lowest offer) and the spread (i.e., the difference between the 

  

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Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 22 -                            (212) 336-1100 

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highest bid and lowest offer). Below is an example of the user interface display on the Bittrex Platform: 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

ii. Order Entry and Order Types 

90. From the “Trade” page, a user can enter a buy or sell order by inputting a price and 

quantity of the asset and the website will calculate the total cost of the transaction including any 

transaction fee.  In order to proceed with a trade, the user is then prompted to create an account or, for 

existing account holders, to log in using their credentials. 

91. Users can then place various types of buy and sell orders, including market orders (i.e., 

an order to buy or sell a crypto asset immediately at the best available price), limit orders (i.e., an order 

to trade a specified quantity of an asset at a specified rate or better), or various conditional orders.  

When placing orders, customers are required to input the following information: token symbol, size, 

price, and time-in-force.   

92. The crypto assets on the “Trade” page may be purchased in exchange for U.S. Dollars 

or certain crypto assets, including bitcoin.  To place an order on the order book, a trader must have an 

available balance of the relevant crypto asset or fiat currency in his or her account to cover the total 

value of the order plus any applicable fees.   

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 22 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 23 -                            (212) 336-1100 

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93. Bittrex’s order book resides on a centralized server maintained by Bittrex and can be 

accessed by customers from Bittrex’s website. 

iii. Order Matching and Trading Rules 

94. Bittrex provides on its website “detailed trading rules for operating” the Bittrex 

Platform.  For example, the Bittrex order book prioritizes orders according to price and then time.  Buy 

orders are prioritized in decreasing order of price with the highest bid placed at the top of the order 

book, and sell orders are prioritized in increasing order of price with the lowest ask placed at the top of 

the order book.  Orders with same price are filled in a first in, first out manner.  Conditional orders are 

stored separately from the order book on a reserved basis.  Bittrex places the order on the order book 

when an asset’s price meets the pre-specified condition and price.   

95. Bittrex also imposes certain trading limits, which include a minimum order size of 

10,000 satoshis (each satoshi is one hundred millionth of a bitcoin).  While there is no maximum trade 

size, customers must have sufficient funds or crypto assets to cover an order at the time it is placed and 

all funds and crypto assets are placed on reserve until the order is executed or cancelled.  

96. Bittrex’s terms of service inform customers that, upon placement of an order, their 

Bittrex account will be updated to reflect the order and the order will be included in Bittrex’s order 

book for matching with orders from other customers.  Customers are also informed that if all or a 

portion of their order is matched with another Bittrex customer, Bittrex will execute the trade and 

update the customer’s Bittrex account accordingly. 

iv. Bittrex and Bittrex Global Share an Order Book and Matching Engine. 

97. Bittrex Global operates a crypto trading platform similar to the Bittrex Platform but 

purports to restrict U.S. customers from accessing the platform.   

98. In late 2022, Bittrex Global made available for trading on its platform approximately 

148 of the crypto assets that are available on the Bittrex Platform, including the crypto assets known as 

“OMG” and “DASH,” which, as discussed in Section III.B below, were offered and sold as securities. 

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 23 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 24 -                            (212) 336-1100 

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99. During the Relevant Period, Bittrex provided support, including shared personnel, to 

Bittrex Global for a wide variety of services, including customer onboarding and services related to the 

selection of crypto assets made available for trading. 

100. During the Relevant Period, Bittrex and Bittrex Global combined their customers’ 

orders into a single, shared order book.  Bittrex Global’s website displays the order book it shares with 

the Bittrex Platform. 

101. The combined order book has a single matching engine with the pre-programmed rules 

described above, which results in a combined liquidity pool for the hundreds of crypto assets that are 

made available on both platforms. 

102. As a result, an order from a Bittrex customer could match with an order from a Bittrex 

Global customer. 

103. The formation and operation of a combined liquidity pool reflects an agreement by 

Bittrex and Bittrex Global to act in concert to provide a market place and facilities—the Bittrex 

Platform—for bringing together buyers and sellers of crypto assets, including crypto asset securities. 

104. During the Relevant Period, Bittrex and Bittrex Global shared control over the 

combined liquidity pool and market place. 

105. Pursuant to a licensing agreement, Bittrex has provided Bittrex Global the right to use 

the technology underlying the shared order book and matching engine, with Bittrex personnel in the 

United States responsible for maintaining the technology.   

106. As such, though Bittrex and Bittrex Global act in concert in providing this market place 

and facilities, Bittrex exercises operational control and unilateral discretion and decision-making over 

the Bittrex Platform. 

D. Bittrex Settles Customers’ Trades. 

107. Pursuant to trading rules posted on Bittrex’s website, “Bittrex settles all filled orders 

immediately, by debiting and crediting the relevant balances of assets in both traders’ accounts.”   

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 24 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 25 -                            (212) 336-1100 

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108. During the Relevant Period, Bittrex held all crypto assets traded on the Bittrex Platform 

in Bittrex-controlled wallets and settled trades by debiting and crediting Bittrex’s internal ledgers.  If a 

customer submitted a request to withdraw funds or crypto assets, Bittrex would transfer the funds or 

assets from the Bittrex-controlled bank account or digital wallet to the customer’s designated account 

or digital wallet. 

E. Bittrex Charges Fees on Executed Trades. 

109. Bittrex charges both the buyer and seller of each executed trade a varying fee or 

“commission” depending on the trading pair, the price of the executed order, the user’s 30-day trading 

volume, and other factors.  As of February 2023, Bittrex’s fee rate ranges between 0.05% and 0.35% of 

the principal amount traded.  Bittrex’s website states:  “[T]rading fees are reduced according to the 

USD value of [the customer’s] total volume traded by [a customer’s] account over the previous 30 

days.”  Bittrex “reward[s] user[s] who drive liquidity to Bittrex” and Bittrex’s website states, “[t]he more 

you trade, the more you save.” 

III. THE CRYPTO ASSETS TRADED ON THE BITTREX PLATFORM INCLUDE 
ASSETS THAT WERE OFFERED AND SOLD AS SECURITIES. 

110. Throughout the Relevant Period, the Bittrex Platform has made available for trading 

crypto assets that were offered and sold as investment contracts, and thus securities, under Section 

3(a)(10) of the Exchange Act and Howey.  Set forth in Section III.B below are specific details regarding 

six examples of crypto asset securities that have at various times been made available by Bittrex for 

trading on the Bittrex Platform—a non-exhaustive list of such crypto asset securities.   

111. In an effort to grow the Bittrex Platform and boost its own trading profits, Bittrex—

without registering with the SEC in any capacity—made strategic decisions to add new crypto assets to 

the Bittrex Platform even though the assets had characteristics of securities.  Even before the SEC 

issued the DAO Report, Bittrex was in fact highly cognizant of the risk that it was permitting investors 

to trade in securities available on the Bittrex Platform.  In order to avoid scrutiny by the SEC, Bittrex 

engaged in a coordinated effort with the issuers of those crypto assets to delete—or “scrub”—from the 

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Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 26 -                            (212) 336-1100 

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issuers’ offering and marketing materials any “investment-related terms” that would reveal that these 

assets were offered and sold as securities, such as “price prediction[s]” and statements related to 

“expectation of profit”—without actually altering the economic substance of the offerings.  

A. In an Effort to Maximize Its Trading Profits, Bittrex Added Crypto Assets to the 
Bittrex Platform Despite Regulatory Concerns, While Coordinating a Campaign 
to “Scrub” Potentially Problematic Public Statements About These Assets. 

112. Bittrex had a strong financial incentive to make additional crypto assets available for 

trading on the Bittrex Platform because Bittrex’s primary source of income was trading fees paid by 

Bittrex customers (which amounted to over $1.3 billion from 2017 to 2022).  And adding new assets, 

according to a Bittrex employee responsible for managing the listing process for such assets, “kept user 

interest up.”   

113. As a Bittrex shareholder, Shihara similarly had a personal financial incentive to add new 

assets to the Bittrex Platform because increased trading fees earned by Bittrex meant more revenues for 

Bittrex.  This also resulted in higher compensation to Shihara, whose compensation was directly tied to 

Bittrex’s revenues.  Indeed, between April 2017 and March 2020, Shihara received at least $130 million 

in bonuses and profit distributions. 

114. Bittrex and Shihara had in place monthly targets for the number of new crypto assets 

that would be made available on the Bittrex Platform.   

115. When deciding whether to include an asset on the Bittrex Platform, Bittrex assessed 

whether the financial benefits of doing so outweighed the risk that the asset in question would be 

subject to scrutiny by regulators, including specifically the SEC.  For example, in or around March 

2017, Shihara told the other Bittrex co-founders with regards to a particular crypto asset: 

the problem is that its going to be seen by the SEC as a security.  im 
meeting with these guys face to face to get specifics on how much they 
want to raise, who they are raising it from, and what they expect the after 
market to be.  its a big enough opportunity that we might want to roll the 
dice on the sec investigation.  we have a couple of paths forward but one 
idea was to have them take a position in bittrex and own the risk of an 
SEC investigation with us. 

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 26 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 27 -                            (212) 336-1100 

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i. Until 2017, Bittrex Did Not Have a Formal Process or Policy in Place for 
Determining Whether to Make a Particular Crypto Asset Available on the 
Bittrex Platform. 

116. For the first several years of its operation, Bittrex’s “compliance review” for prospective 

crypto assets primarily consisted of informal review of the whitepaper published by the issuer of the 

crypto asset and a request that the issuer provide Bittrex with any legal analysis it had performed as to 

the asset.   

117. In late 2017, Bittrex for the first time established a formal process for determining 

which assets to admit to the Bittrex Platform which included analyzing whether the assets were offered 

and sold as securities.  As an initial step, issuers would submit a form on Bittrex’s website initiating a 

“preliminary review” of the asset by Bittrex.  Bittrex would then use this form to determine which 

crypto assets should proceed to a “full evaluation.”   

118. The “full evaluation” stage was conducted by Bittrex’s “Token Review Committee” (the 

“Committee”).   The Committee was formed in 2017 and was composed of at least five members with 

Shihara as its chair.  As part of the “full evaluation,” the Committee conducted an additional review of 

the asset, including gathering information from the issuer of the asset such as a legal opinion from 

counsel retained by the issuer as to whether the asset was offered and sold as a security, and then voted 

on whether to include the asset on the Bittrex Platform. 

119. In 2017, Bittrex engaged two law firms to conduct legal analyses of whether crypto 

assets were offered and sold as securities and to advise Bittrex on whether to make the assets available 

for trading on the Platform.    

120. In or around August 2017—shortly after the SEC issued the DAO Report—Shihara, 

along with two other members of the Committee, prepared a “coin compliance check list” concerning 

the crypto assets then available for trading on the Bittrex Platform.  Shihara instructed the other 

Committee members that the checklist should include reviewing marketing materials for words like 

“DAO, shareholder, shares, profit, dividends” that would cause the SEC to “want to investigate,” as 

reflected in the below email: 

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 27 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 28 -                            (212) 336-1100 

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121. Bittrex was aware that if a crypto asset had been marketed as an investment, it would be 

more likely to satisfy the legal test for a security.  For example, in or around July 2017, Shihara 

instructed an issuer that it “should not market [its token] as any kind of investment.  Stick to utility 

token so none of us get into trouble.”   

ii. Bittrex Coordinated with Issuers of Crypto Assets to “Scrub” Public 
Documents in an Effort to Avoid “Unwanted Attention from the SEC.” 

122. To further its dual goals of making more crypto assets available on the Bittrex Platform 

and avoiding regulatory scrutiny, starting in at least May 2017, Bittrex routinely directed that crypto 

asset issuers “scrub” their offering and marketing materials of “investment-related terms,” including 

language that would “get unwanted attention from the SEC.”  Bittrex regularly asked issuers to remove 

“problematic statements” from their marketing materials—statements indicating that the asset was 

marketed as a security—as a prerequisite for making the issuers’ crypto assets available for trading on 

the Bittrex Platform.  Bittrex unofficially dubbed this practice the “problematic statement cleanup.” 

123. The “problematic statement cleanup” was nearly always done after the initial offering of 

the crypto asset—i.e., after the crypto asset had already been offered and sold to investors.  In other 

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 28 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 29 -                            (212) 336-1100 

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words, the issuers of the crypto assets had already marketed, offered, and sold the crypto assets to the 

investing public by using the very “problematic statements” that Bittrex recognized were “investment-

related terms” that indicated the assets could be securities.  In requiring issuers to “scrub” their 

documents, Bittrex did not actually change the economic reality of those offers and sales, but rather 

simply attempted to remove or “scrub” any evidence of these public statements without changing the 

actual characteristics of the offering or asset even assuming the deletions were successful. 

124. For example, in a discussion on Slack between Bittrex and the issuer for the crypto asset 

security known as “NGC” in or about April 2018—months after the NGC ICO—NGC’s issuer told 

Bittrex: 

We have removed everything related to growth, indication as 
“investment,” coin price or any posts in relation to projections, growths 
or forecasts . . . . This was pure legacy and we are moving fast to ensure 
delivery of our roadmap . . . . Also we updated the roadmap and 
whitepaper.  We removed all old links that were posted in threads over 
the last 4 months.  Everything is deployed to production, our entire team 
feels that everything is removed related to the raised concerns.   

 

125. In another example, in connection with making the crypto asset security known as 

“TKN” available for trading on the Bittrex Platform, Shihara reminded the TKN issuer team (on the 

very same day that it completed its initial public sale of TKN tokens) to “scrub” its documents of 

“investment related terms”: 

 

 

 

 

 

 

 

126. As part of the “problematic statement cleanup,” Shihara and other Bittrex employees 

also reviewed issuers’ whitepapers and marketing materials, including social media communications, 

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 29 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 30 -                            (212) 336-1100 

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and then instructed the issuers, usually in messages through private Slack channels, to remove or 

“scrub” “problematic statements.”  As chair of the Committee until at least November 2019, Shihara 

directed the “problematic statement cleanup.” 

127. As part of the “scrubbing” campaign, Bittrex even provided its employees with a “cheat 

sheet” as a guide to identifying and addressing “problematic features” and “problematic statements.”  

The “cheat sheet,” excerpted below, was affixed to the checklist that Bittrex used  

to document its review of issuer applications and accompanying documentation, as well as the final 

recommendation of the Committee: 

 

 

 

 

 

 

 

 

 

128. Other examples of Bittrex’s “problematic statement cleanup” include: 

a. On or about May 24, 2018, two Bittrex employees told a different issuer team: 
“[O]ur attorney was a little concerned about any statements on your social media 
that can be related to price forecasting … we can work with you folks to clean up 
any statements viewed as problematic … things that can be considered pumping 
price is speculating about price or volume in social media.  Make sure stuff like 
that is cleaned up.” 

b. On or about July 26, 2018, a Bittrex employee told the issuer team for a crypto 
asset:  “please be sure to review all social media postings and remove any tweets, 
or retweets of items that are speculative or encouraging increasing the price of 
the token trading on exchanges … Please go through the feed and clean up 
anything problematic/speculative.”  

c. On or about August 20, 2018, a Bittrex employee told a different issuer team: 
“when we look at listing projects, we also review social media feeds, white paper 
and website for problematic statements that are speculative in nature.  The 

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 30 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 31 -                            (212) 336-1100 

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following are statements/comments identified by our outside counsel that they 
would like to see removed or cleaned up.” 

129. Bittrex made dozens of crypto assets available for trading on the Bittrex Platform after 

directing such “problematic statement cleanup” of the issuer’s public statements, including the crypto 

asset securities NGC and TKN, as well as the crypto asset security known as “IHT.” 

iii. Bittrex Removed from the Bittrex Platform Certain Problematic Assets 
and Later Made Them Again Available on the Platform in an Effort to 
“Remain Relevant.” 

130. In April 2019, SEC staff issued the “Framework for ‘Investment Contract’ Analysis of 

Digital Assets.”  Shortly thereafter, starting in April 2019, Bittrex removed from the Bittrex Platform a 

number of crypto assets, including crypto assets that had been subject to Bittrex’s “problematic 

statement cleanup.”    

131. However, in an effort to “remain relevant” among other crypto trading platforms, 

Bittrex later restored for trading certain crypto asset securities that it had previously removed from the 

Bittrex Platform due to regulatory concerns, including DASH and OMG.   

iv. Bittrex Made Available for Trading a Number of Crypto Assets that 
Bittrex Recognized Had the Characteristics of Securities. 

132. Bittrex made numerous crypto assets available for trading on the Bittrex Platform, while 

ignoring factors indicating that various crypto assets were likely offered and sold as securities.   

133. For example, as part of its evaluation of the crypto asset security known as “MANA,” 

Bittrex recognized that the token had multiple factors that indicated it was likely offered and sold as a 

security, including that the issuer “raised approximately $5M USD from investors … [who] … received 

a discount ranging from 5 to 15%,” and that the issuer purportedly prohibited U.S. persons from 

participating in the offering because the issuers had “not yet made a final determination as to the status 

of MANA Tokens under U.S. federal securities laws.”  Shihara and other Committee members 

nevertheless voted to approve MANA for admission to the Bittrex Platform.   

134. Similarly, in deciding to make the crypto asset security known as “POWR” (which 

Shihara described at the time as #3 on his “token priority list”) available on the Bittrex Platform, 

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Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 32 -                            (212) 336-1100 

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Bittrex ignored clear indications that POWR was marketed, offered, and sold as a security.  In an e-mail 

to the Committee on or about October 11, 2017, a Bittrex employee told Shihara that there were “some 

controversial statements for [the POWR] offering,” including the “Asset Germination Events” 

described in the Power issuer’s whitepaper, which defined such events as: “the sale or crowdfunding of 

an autonomous renewable energy asset which allocates ownership and distribution of income.”  Shihara 

acknowledged but ignored the issuer’s “controversial statements,” and Bittrex subsequently made the 

crypto asset security POWR available for trading on the Bittrex Platform. 

B. The Bittrex Platform Makes Available for Trading Assets that Were Offered and 
Sold as Securities.  

135. Each unit of a particular crypto asset on the Bittrex Platform trades at the same price as 

another unit of that same asset.  Because these assets are interchangeable (e.g., any OMG or fraction 

thereof is just like any other), all tokens of the same issuance increase or decrease in value in the same 

amounts and to the same extent, such that one token is equal in value to any other one token of the 

same name and issuance.  The purchase of any particular token does not appear to give an investor any 

special rights that are not available to any other investor in that type of token, such as separately 

managed accounts, or to capital appreciation or returns that are independent of the returns that may 

inure to other investors in the same token.   

136. The tokens on the Bittrex Platform are available for sale broadly, to any person who 

creates a trading account with the Bittrex Platform, regardless of whether that person treats it as 

anything other than as an investment.  In other words, the Bittrex Platform does not restrict crypto 

asset purchasers to those who might purchase the token for purported consumptive use or who acquire 

it for any other purported non-investment purpose.  To the contrary, the “Trade” page displays 

changes in prices for the crypto assets similarly to trading platforms that allow investors to transact in 

securities registered under the Exchange Act.  (Again, the difference is that, unlike with the Bittrex 

Platform, investors transacting in registered securities on trading platforms are doing so through 

regulated brokers in regulatory-compliant securities markets, not directly with exchanges). 

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 32 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 33 -                            (212) 336-1100 

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137. The Bittrex Platform does not restrict how many units of a crypto asset any given 

investor may purchase.  Investors are not required to purchase quantities tied to any purported non-

investment “use,” if any, that may exist for the asset.   

138. The assets available for sale on the Bittrex Platform are transferable, and eligible for 

resale on the Bittrex Platform or other crypto asset trading platforms immediately upon purchase and 

without any apparent restrictions on resale. 

139. It is therefore not surprising that many of the tradeable crypto assets on the Bittrex 

Platform have characteristics indicating that they may be available to U.S. investors who make an 

investment of money in a common enterprise with a reasonable expectation of profits derived from the 

efforts of others.   

140. Indeed, Bittrex made available for trading on the Bittrex Platform crypto assets that 

have been the subject of prior SEC enforcement actions, including but not limited to EOS, Enigma, 

Unikrn, SALT, and HYDRO.   

141. For purposes of prevailing on the Exchange Act claims set forth herein, the SEC need 

only establish that Bittrex transacted in a single crypto asset security.  Nevertheless, set forth below are 

specific details regarding a non-exhaustive list of six examples of crypto asset securities available for 

trading on the Bittrex Platform: 

i. OMG 

142. The so-called OMG Network, previously known as OmiseGO, was founded in 2017.  

In or around December 2020, Genesis Block Ventures (“GBV”), a Hong Kong-based venture capital 

firm, acquired the OMG Network.  In or around February 2021, the OMG Network partnered with 

another entity to develop the so-called Boba Network.  In or around August 2021, the OMG Network 

changed its name to the “OMG Foundation” and the following year became the “BOBA Foundation.”   

143. The OMG token was issued by the OMG Network as a “proof-of-stake” token on the 

OMG Network.  The OMG Network held an ICO on or about June 24, 2017, raising approximately 

$25 million through the sale of OMG tokens to the public in exchange for ether.  The OMG Network 

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issued a maximum supply of approximately 140.2 million OMG tokens, and sold approximately 65.1% 

of this supply to the public in the ICO.   

144. Today, OMG tokens are available for buying, selling, and trading on several crypto asset 

trading platforms in exchange for fiat currency (namely U.S. Dollars) or certain crypto assets.  OMG 

was made available for trading on the Bittrex Platform in or around July 2017.  After being removed 

from the Bittrex Platform in June 2019, OMG was again made available for trading on or about April 9, 

2021.  OMG was also available for trading on the Bittrex Global platform. 

145. From the time of its offering and continuing through the Relevant Period, OMG has 

been offered and sold as an investment contract and therefore a security.  After it was listed on Bittrex 

for trading, the ever-changing management of the OMG Network continued to tout its efforts to grow 

the value of OMG and the investment opportunities OMG presented. 

Purchasers of OMG invested in a common enterprise.   

146. The OMG Network pools the proceeds from OMG token sales to fund the 

development, marketing, business operations, and growth of the OMG Network, as reflected in 

OMG’s “Crowdfunding Whitepaper,” which used the following chart to explain how funds raised 

during the ICO would be used to develop the network: 

 

 

 

 

 

 

 

147. Specifically, the OMG whitepaper explained that the “[m]ajority of the funds raised will 

go towards the development of open source software.  Overall fund usage will be split approximately 

2:1 ratio between network and end-user application development.”  The whitepaper also detailed how 

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the “budget” would be used, which included items such as “[c]onstruct and roll-out blockchain, 

including full node client,” and “[c]onstruct and roll-out decentralized custody of funds.”   

148. The stated distribution of the OMG tokens tied the fortunes of the OMG token holders 

together and to the fortunes of the promoters.  For instance, the OMG tokens were allocated as 

follows: 65.1% for purchase by the public; 20% for “future costs and uses including use for network 

validation as part of the development and execution of the project” as a “reserve”; 9.9% for OMG 

“team members and key contributors who worked to develop the ideas, supporting structures and 

actual implementation of the OmiseGO Project”; and 5% for an airdrop to ether token holders to 

“encourage incentive alignment with the Ethereum mainnet.”  Even after the ICO, and through 

changes in management, the promoters of OMG continued to tout the connected fortunes of OMG 

token holders and the promoters. 

149. The price of all OMG tokens goes up or decreases together. 

Investors in OMG had a reasonable expectation of profits based on the efforts of others.   

150. In addition to the public statements cited above, in connection with the ICO and 

continuing after OMG was listed on the Bittrex Platform, OMG’s promoters disseminated information 

that led OMG token holders to reasonably expect to profit from the promoters’ efforts to grow the 

OMG Network.   

151. For example, the whitepaper touted the experience of the parent holding company 

(Omise Holdings Pts. Ltd.), the OMG Network team, and advisors that would contribute to building a 

successful blockchain network—the usage of which would derive value to the OMG token holders.  

The whitepaper stated that “[o]ur technical team is led by experienced professionals who have track 

records in high growth technology startups” and that they had the “best setup to implement this 

project” given the parent holding company’s “established track record in building a fast-growing fintech 

startup in the payments and value-transfer landscape.”   

152. Further, materials available at the time of the ICO indicated that the development of the 

platform by the OMG Network team could lead to profits for OMG token holders.  For instance, the 

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whitepaper provided that “[a]t the OmiseGo Network layer, token holders will be eligible to earn 

transaction fees for interchange payments and decentralized exchange.  Activity ‘on-chain’ will pay 

transaction fees to token holders for validating the network.”   

153. Moreover, the OmiseGo website at the time of the ICO indicated that OMG token 

holders could anticipate receiving a share of the fee revenue generated on the platform, and a document 

purporting to establish the terms under which users purchased OMG during the ICO clarified that 

potential for profit was linked to efforts of the OMG Network team (“[W]hile the individuals and 

entities . . . assigned to [create the network] will make reasonable efforts to develop and complete 

OmiseGO, it is possible that such development may fail and User’s OMG may become useless and/or valueless due to 

technical, commercial, regulatory or any other reasons” (emphasis in original)). 

154. Even after the OMG Network released a beta version of its platform in mid-2020 

(which did not exist at the time of the ICO), the OMG Network team continued to emphasize their 

commitment to developing the network.  For instance, in or around June 2020 (more than two years 

after OMG was listed on the Bittrex Platform), the OMG Network team expressed an intended focus 

on future marketing for the platform:  “We’ve always followed the mantra that our work will speak for 

itself in the market place and we’ve gone very light on the marketing—focusing instead on top-notch 

engineering and solid business development.”  In or around October 2020, the OMG Network’s CEO 

wrote that for the remainder of 2020 the OMG Network “team remains focused on onboarding our 

CeFi partners to build out the Layer-2 value transfer use-case and improve the protocol and UX” and 

that the “goal is to get OMG Network technology embedded into a network of merchants and 

enterprises, so it becomes the go-to protocol for value transfer.”    

155. Similarly, while the management of the OMG Network continued to change hands, the 

new teams still stated publicly that they would focus on making efforts to achieve growth for OMG.  

For example, at the time of the acquisition by GBV in or around December 2020, the OMG Network 

stated, “Today, @genesisblockhk acquires OMG Network.  We’ll work together to grow our ecosystem 

and accelerate the adoption of OMG Network as the value transfer layer for #Ethereum!”  And in 

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SEC v. Bittrex, Inc., et al. New York Regional Office 
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November 2021, the new team touted, “OMG was trading around $3-4 when the current team took 

over.  Fair to say quite a bit of value has been created since then between OMG and BOBA.” 

156. Upon acquisition of the OMG Network in December 2020, GBV promised to continue 

to “promote the accelerated growth of OMG Network, and further enhance the adoption of OMG 

blockchain in Asia and beyond.”   

157. These statements led reasonable OMG investors to expect that the demand for OMG 

would likely increase based on the OMG Network’s efforts to increase demand for its technology, 

thereby potentially resulting in a price increase for OMG. 

ii. DASH 

158. Dash is a blockchain protocol that was launched on or about January 18, 2014 by 

founder Evan Duffield.  According to its website, www.dash.org, Dash is a crypto payment platform 

forked from the Bitcoin source code. 

159. “DASH” is the native token of the Dash blockchain and is the token used to pay 

transaction fees required to propose transactions on the blockchain.  The platform has built proprietary 

mobile and desktop wallet applications available on the Google Play store and Apple’s App Store.  

There is a maximum supply of approximately 18.92 million DASH tokens.   

160. Dash’s initial distribution of DASH tokens was in the form of rewards to miners that 

provided value to the DASH network by mining blocks for the blockchain. 

161. Today, DASH tokens are available for buying, selling, and trading on several crypto 

asset trading platforms in exchange for fiat currency (namely, U.S. Dollars) or certain crypto assets, 

including bitcoin.  DASH has been available for trading on the Bittrex Platform since 2014.  After 

being briefly removed on or about December 29, 2020, DASH was again made available for trading on 

the Bittrex Platform on or about September 1, 2021.  DASH has also been available for trading on the 

Bittrex Global platform. 

162. From the time of its offering and continuing through the Relevant Period, DASH was 

offered and sold as an investment contract and therefore a security.   

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Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
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Purchasers of DASH invested in a common enterprise.   

163.  Today, Dash claims to be run by a subset of its users, which are called “masternodes.”2  

Masternodes are servers that provide a second layer of services and governance on the Dash blockchain 

on top of the services provided by standard nodes.  Ten percent of the block rewards that are generated 

from mining each month are sent to the Dash Treasury to fund improvements to the Dash platform 

and DASH token.  The bulk of the 10% of the block rewards are distributed to DCG (Dash Control 

Group), an entity controlled by the Masternodes. (The Masternodes and the regular nodes split the 

remaining 90% of the block rewards, with the Masternodes receiving a little over half of that 90%.).  

The Masternodes vote on all funding proposals, so the Masternodes are in essence voting to fund 

DCG, since DCG submits the majority of the proposals that get approved and funded from the Dash 

treasury.  The Masternodes also indirectly control DCG through the Masternodes’ voting control over 

the trust which is the sole shareholder of DCG.  DCG’s improvements to the Dash platform and the 

DASH token increase the DASH token’s value, thereby benefitting all token holders.  Accordingly, the 

fortunes of the investors (i.e., the non-Masternode token holders) are tied to the fortunes of the 

Masternodes and DCG. 

 
164. Below is a breakdown of how rewards are purportedly distributed on the Dash 

platform: 

 

 

 

 

 

                                                 
2 A “node” on a blockchain generally means one of the computers that run the blockchain software to 
validate and store the history of transactions on the network.  Only those who stake 1,000 DASH and 
have the sufficient server capacity to provide the advanced services offered by Dash can become a 
“masternode” owner. 
 

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SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
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165. The price of all DASH tokens increases or decreases together. 

  

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SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
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Investors in DASH had a reasonable expectation of profits based on the efforts of others. 

166. From the founding of the Dash platform, Dash has created a business model and 

disseminated information that led DASH holders to reasonably expect to profit from Dash’s efforts to 

develop, expand, and grow the protocol.   

167. For instance, Duffield purportedly launched DASH to improve on Bitcoin’s relatively 

slow transaction times and privacy issues.  To address this, he invented an algorithm used for 

calculations on the DASH blockchain, which Dash touts as “one of the safest and more sophisticated 

cryptographic hashes in use by modern cryptocurrencies.”   Subsequently, Duffield also invented 

“InstantSend,” which Dash touts as enhancing DASH’s speed by allowing users to transfer DASH 

without waiting for the transactions to be confirmed on the blockchain, and “PrivateSend,” which Dash 

touts as enhancing DASH’s privacy by making transactions more difficult to trace.   

168. Further, DCG uses the DASH it receives from the Dash treasury to fund performance 

enhancements and to add features to the Dash platform.  For instance, DCG works to advance DASH 

as a medium of payment.  Dash’s website states that DASH can be spent at “thousands” of retailers 

through a “DashDirect” consumer app and, in or around May 2022, Dash tweeted, “DCG is a [Dash 

Funded Organization] with a dedicated team working for the Dash network that is responsible for the 

main development of Dash.  Its mission is to provide greater financial freedom by delivering and 

improving financial solutions which are secure, reliable, decentralized, and usable for all.” 

169. Dash also promotes its token’s superiority over other tokens due to the attributes it has 

developed, namely greater scalability of the protocol (which increases usability), short processing times, 

and low transaction costs.  Accordingly, as the use of DASH expands, the demand for DASH will 

increase, and its value will rise. 

170. Finally, the value of DASH is further enhanced by the fact that the token has a limited 

supply and is deflationary in nature.  For example, the Dash website explains that the block reward is 

reduced by approximately 7% every 210,240 blocks (approximately every 380 days).    

  

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Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
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iii. ALGO 

171. Algorand is a blockchain protocol founded by Silvio Micali.  The Algorand blockchain 

uses a consensus algorithm it calls “pure proof-of-stake,” in which each user’s ability to influence the 

choice of a new block is proportional to its stake (number of tokens) in the system. 

172. “ALGO” is the native token of the Algorand blockchain, and has a maximum supply of 

10 billion ALGO minted at the launch of the Algorand network.  Because ALGO is the native token of 

the Algorand blockchain, those utilizing the Algorand blockchain need to hold (and potentially stake) 

certain amounts of ALGO. 

173. The Algorand Foundation Ltd. (the “Algorand Foundation”) conducted an initial 

ALGO token sale on or about June 19, 2019, selling 25 million tokens at $2.40 per ALGO, raising 

approximately $60 million.  In advance of the token sale, the Algorand Foundation promoted the token 

sale on Twitter, and included a link to its website. 

174. The Algorand Foundation promoted the June 19, 2019 token sale in part with a refund 

policy that allowed ALGO investors to return the ALGO to the Algorand Foundation one year later at 

90% of the original purchase price.  The Algorand Foundation explained the economic rationale behind 

the refund policy by noting its own belief in and commitment to the value of ALGO, stating:  “We 

believe in the underlying value of the Algorand blockchain, the Algo, and the potential of the borderless 

economy.  Our goal is to invest in the growth, sustainability and performance of that economy.” 

175. In other words, in promoting the ALGO token sale, the Algorand Foundation tied the 

potential growth of the Algorand blockchain to potential demand for the ALGO token itself, and to its 

own commitment to preserving a price floor for ALGO. 

176. In or around August 2019, the Algorand Foundation publicly offered ALGO investors 

an early refund opportunity, and ALGO investors returned a total of approximately 20 million ALGO 

tokens to the Algorand Foundation in exchange for a refund that was 85% of the original purchase 

price.  In or around June 2020, ALGO investors who did not refund their ALGO tokens in August 

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2019 were publicly offered a second refund window.  ALGO investors returned a total of 

approximately 5 million ALGO tokens for a refund that was 90% of the original purchase price. 

177. Through its rewards programs and incentive structures, the Algorand Foundation 

continued distributing tokens after the June 2019 token sale.  As of September 2022, approximately 6.9 

billion ALGO were in circulation. 

178. Today, ALGO is available for buying, selling, and trading on crypto asset trading 

platforms in exchange for fiat currency (namely, U.S. Dollars) or certain crypto assets, including bitcoin.  

ALGO was available for trading on the Bittrex Platform and the Bittrex Global platform from 

approximately April 2020, and is currently available on both platforms.   

179. From the time of its offering and continuing through the Relevant Period, ALGO was 

offered and sold as an investment contract and therefore a security. 

Purchasers of ALGO invested in a common enterprise.   

180. Today, two entities are responsible for Algorand:  (1) the Algorand Foundation, an 

organization purportedly focused on Algorand “protocol governance, token dynamics and supporting 

grassroots, open-source development on the Algorand ecosystem,” which was incorporated in 

Singapore; and (2) Algorand, Inc., a company purportedly focused on “layer-1 development of the 

Algorand Protocol and enabling Enterprise adoption of Algorand blockchain technology.” 

181. The Algorand Foundation and Algorand, Inc. purportedly collaborate on projects and 

initiatives for the Algorand community. 

182. Shortly before the June 19, 2019 ALGO token sale, Steven Kokinos, the CEO of 

Algorand, Inc., posted a publicly-available article stating:  “(a) We will be holding our founder’s tokens 

for the long term and will not be selling them.  (b) We will use our founder’s tokens to participate in 

consensus and assist in securing the network, though we will never represent more than 49% of the 

voting.  (c) We will use our founder’s tokens to support the ecosystem and encourage development.” 

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SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
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183. The Algorand Foundation purportedly owns 500 million ALGO tokens and the 

participation and governance rewards associated with those tokens.  Also, members of the Algorand 

Foundation’s board of directors and its advisory committees receive ALGO as compensation. 

184. In addition to the tokens it owns, as of September 2022, the Algorand Foundation also 

controls over 3 billion ALGO tokens in wallets publicly identified as for “Community & Governance 

Rewards,” “Ecosystem Support,” and “Foundation Endowment,” signaling to the public that the 

Algorand Foundation would use the ALGO tokens to support the ALGO economy or ecosystem as 

well as to reward itself and participants in this ecosystem. 

185. The price of all ALGO tokens goes up or decreases together. 

Investors in ALGO had a reasonable expectation of profits based on the efforts of others.   

186. The publicly available information disseminated by Algorand, Inc. and the Algorand 

Foundation led ALGO investors to reasonably expect to profit from Algorand, Inc.’s and the Algorand 

Foundation’s efforts to grow the Algorand protocol, which would in turn potentially increase demand 

for, and therefore the value of, the ALGO token itself. 

187. In public statements on Twitter, as well as on their respective websites, Algorand, Inc. 

and the Algorand Foundation promote the Algorand protocol. 

188. Until approximately May 14, 2022, the Algorand Foundation promoted that ALGO 

investors could receive participation rewards (purportedly a form of staking by delegation) by 

“participation in the Algorand ecosystem via holding Algo in an online wallet.” 

189. As of approximately May 14, 2022, the Algorand Foundation publicly stated that it 

would replace the participation rewards that ALGO holders were entitled to receive with so-called 

governance rewards.  The Algorand Foundation described “Governance” as a way for investors to 

make investment returns on their ALGO purchases—stating it is “a decentralized program which 

allows Algo holders to vote on the future of Algorand” and “the best way to earn rewards for holding 

Algo, with APY% of 10.02% - 14.05% seen in previous periods.” 

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SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
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190. The Algorand, Inc. and Algorand Foundation websites tout their teams’ technical 

experience and expertise in the areas of cryptography and business development.  For example, 

Algorand, Inc.’s website states:  “Blending technical mastery and professional stability, the Algorand 

team consists of internationally recognized researchers, mathematicians, cryptographers, and 

economists along with proven business leaders from global technology companies.” 

191. In a March 2022 report, the Algorand Foundation publicly stated that it had started a 

new program to incentivize the “growth of the ecosystem, which is the fundamental need of a maturing 

blockchain.  The program includes a series of loans to help the growth of our DeFi network and to 

expand the institutional investments in the ecosystem … The Algorand Ecosystem team facilitates the 

development and growth of the ecosystem and developer pipeline including undiluted funding, 

technical onboarding and standardization conventions for ASAs, Wallets and AVM.” 

192. Algorand, Inc. and the Algorand Foundation also take steps to incentivize third parties 

to participate in and attract users to the ALGO protocol.  For example, in or around February 2022, 

the Algorand Foundation announced a $10 million incentive for developers that can make the Algorand 

blockchain compatible with applications built on the Ethereum blockchain. 

193. Also in or around February 2022, the Algorand Foundation announced a section of its 

website called AlgoHub, “a virtual community designed to grow the pipeline of #Algorand 

developers.”  

194. These statements led reasonable ALGO investors throughout the Relevant Period to 

expect that the demand for ALGO would likely increase based on Algorand, Inc.’s and Algorand 

Foundation’s efforts to increase demand for the Algorand technology, thereby resulting in a price 

increase for ALGO. 

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Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
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iv. TKN 

195. In 2017, Monolith Studio, based in London, England, announced the launch of 

“TokenCard,” purporting to be “the first debit card powered by smart contracts incorporating the 

VISA payments network with Ethereum.”  TokenCard also created and issued the TKN token.   

196. According to TokenCard’s whitepaper, TokenCard would be usable anywhere VISA 

debit cards could be used, including at ATMs.  The whitepaper further explained that TokenCard 

would allow users to fund their card with ether and up to five other crypto assets which users would 

select.  The whitepaper noted that there would be a 1% licensing fee assessed to card swipes which 

would be used to fund the TokenCard smart contract. 

197. In the whitepaper, TokenCard stated that it would create a fixed number of TKN prior 

to an ICO for TKN, and would not create any more TKN thereafter.  The whitepaper stated that TKN 

holders would be entitled to a proportion of the licensing fees accrued by the TokenCard smart 

contract.  TKN holders purportedly also received a number of benefits from the TokenCard smart 

contract, including free debit card usage for TKN-backed swipes and discounted fees.   

198. In 2017, TokenCard conducted an ICO of TKN and raised approximately $16.7 million 

through offers and sales of TKN.  Shortly after the ICO, at some point during the period between May 

2 and May 7, 2017, Bittrex first made TKN available on the Bittrex Platform.  Bittrex removed TKN 

from the Bittrex Platform on or about December 8, 2017.  

199. From the time of its offering and throughout the period it was listed on the Bittrex 

Platform, TKN was offered and sold as an investment contract and therefore a security. 

Purchasers of TKN invested money in a common enterprise. 

200. TokenCard’s whitepaper stated that proceeds from the TKN sale would be pooled to 

develop TokenCard’s business, noting that “[f]unds raised during the crowdsale [ICO] will be used 

solely for the development and benefit of the Token platform.”  The whitepaper also stated that the 

funds would be used specifically to “finance development, partnership programs, float … operations, 

regulatory and most importantly, marketing and customer acquisition.”   

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Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 46 -                            (212) 336-1100 

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201. The price of all TKN tokens goes up or decreases together. 

Investors in TKN reasonably expected to profit from the efforts of others. 

202. TokenCard’s whitepaper indicated that investors could expect a direct return on their 

TKN investment through the efforts of the company and its affiliates.  For example, the whitepaper 

made the following statements regarding the expected growth and success of TKN: 

• “TKN is designed to be the single token one might consider in order to 
reap the benefits of the coming industry growth;” and 

• “[W]e intend to put as much money and time into these as we possibly 
can in order to maximize the value of TokenCard and TKN and dominate 
this post-bank era.” 

203.  The whitepaper described a mechanism called “Cash and Burn” that, functionally, 

amounted to a pro-rata sharing in fees generated on the platform.  Per this mechanism: 

Fees from card swipes will be assessed in the token being used to fund 
the swipe.  These fees will be sent directly to the TKN Asset Contract. 
Over time, this contract will accrue tokens in proportion to the tokens 
held and used by TokenCard customers around the world.  At any time, 
a holder of TKN can “Cash and Burn” the TKN for her pro-rata share 
of each token held by the TKN Asset Contract.   

204. According to the whitepaper, “Cash and Burn” ensured that the TKN token would 

have a market value at or above the assets contained in the TKN smart contract, noting further that if 

the value dropped below those assets, “arbitrageurs will purchase TKN and burn it, yielding a 

dividend.”  The whitepaper promised that through this mechanism, TKN holders would get “higher 

average returns and lower volatility than they would trying to invest individually in tokens.”  The 

whitepaper further described the “Cash and Burn” feature as follows: 

 

 

 

 

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 46 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 47 -                            (212) 336-1100 

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v. NGC 

205. NAGA Development Association Ltd. (“NAGA”) is a corporation formed in Belize in 

or around October 2017, in partnership with the NAGA Group AG, a German holding company 

founded in 2015 that was purportedly listed on the German Stock Exchange.   

206. NGC is an ERC-20 token that NAGA issued on the Ethereum blockchain.  NAGA 

claimed that “NGC is a decentralized cryptocurrency for trading and investing in financial markets, 

virtual goods and cryptocurrencies.”   

207. NAGA conducted what it described as a NGC “pre-sale” in or around November 2017 

and an NGC “initial token sale” in or around December 2017, in which it raised approximately $25 

million from more than 36,000 investors. 

208. To promote its NGC token sale, NAGA issued a whitepaper to prospective investors.  

In the whitepaper, NAGA described that a total of 400 million NGC tokens would be issued on the 

Ethereum blockchain via a smart contract, and that this would be a “hard cap,” such that no additional 

NGC would be created.  NAGA stated in the whitepaper that “issuing a token allows NAGA to be 

backed by investors from all over the world who will have access to NGC right after its creation.”  It 

also described its plans to be “traded on major exchanges.” 

209. According to the whitepaper, 55% of the tokens were to be offered during the pre-sale 

and initial token sale.  The remaining 45% were to be divided among NAGA’s team and advisors, and a 

reserve pool purportedly meant to ensure sufficient liquidity and help create a market for NGC. 

210. NGC was made available for trading on the Bittrex Platform from approximately May 

22, 2018 through approximately June 14, 2019. 

211. From the time of its offering and throughout the period it was listed on the Bittrex 

Platform, NGC was offered and sold as an investment contract and therefore a security. 

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 47 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 48 -                            (212) 336-1100 

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Purchasers of NGC tokens invested in a common enterprise.   

212. NAGA described to investors that it would pool the funds it raised in the token sales to 

build and promote the NAGA ecosystem, noting it wanted investors to share in the potential profits 

from the efforts it would fund with these proceeds, i.e., to “be able to participate in its future growth 

through this form of funding, as compared to traditional venture funding.” 

213. NAGA described in detail how the proceeds from the funds raised from investors 

supposedly would be used to build its ecosystem:   

 

 

 

 

 

 

 

 

 

 

214. The price of all NGC tokens goes up or decreases together.   

215. NAGA’s distribution of tokens among investors and NAGA’s team and advisors 

aligned their incentives in building a successful NGC platform, as any increase in NGC’s market price 

would yield profits to NAGA’s team and advisors as well as other NGC investors. 

Investors in NGC had a reasonable expectation of profits based on the efforts of others.   

216. NAGA marketed NGC such that NGC investors reasonably expected to profit from 

NAGA’s efforts to grow its platform.  NAGA’s whitepaper contained explicit statements indicating 

that token holders should expect an increase in token price based on the efforts of the company in 

developing the business and its “ecosystem.”   

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 48 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 49 -                            (212) 336-1100 

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217. NAGA described in its whitepaper that it would work to develop the NGC platform, 

thereby “building the value of the ecosystem for the benefit of long time holders and token sale 

participants.”  NAGA further explained that “NGC is backed and additional NGC demand is 

accelerated and generated by the multi-hundred million publicly listed NAGA AG.”  In fact, NAGA 

tied the purported success of its publicly traded German partner to the success it expected to achieve 

with the NGC token, positing “if [NAGA Group AG’s] stock already did 400% after three months, 

what will its token do?” 

218. In a section of its whitepaper entitled “Why the NAGA Initial Token Sale Will Be a 

Success Story,” NAGA touted the strength of its team and resources in growing the value of the NGC 

token.   

219. NAGA described how the “extensive experience” of its team in developing trading 

platforms would assist the growth of the platform.  NAGA also expressed its confidence that the NGC 

token price would “grow exponentially,” due to its efforts at growing the number of users of its 

platform.   

vi. IHT 

220. I-House Token or “IHT” was launched through Aladdin Fintech Company Ltd. 

(“Aladdin”), an LLC formed in the Cayman Islands in or around February 2018.  Aladdin described 

IHT as a “Global Real Estate Blockchain Cloud Platform” with a mission to integrate global real estate 

markets with the blockchain.  The company’s whitepaper described that “[t]hrough joining blockchain 

and real estate, the real estate developer, financial institutions and their users can be connected and the 

transaction of real estate can be made a part of the ‘digital credit society,’” and further promised that all 

“owners and investors will become beneficiaries of i-house.com real estate blockchain.” 

221. Aladdin conducted an ICO of the IHT token in or around January 2018, raising 

approximately $40 million.  The token was thereafter available on the Bittrex Platform from 

approximately October 2, 2018 through approximately June 7, 2019.  

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 49 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 50 -                            (212) 336-1100 

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222. From the time of its offering and throughout the period it was listed on the Bittrex 

Platform, IHT was offered and sold as an investment contract and therefore a security. 

Purchasers of IHT invested money in a common enterprise. 

223. The IHT whitepaper stated that the IHT platform was not yet developed and that the 

proceeds from the token sale would be used to fund development of various aspects of the platform 

and business.  Investor funds raised during the ICO were pooled in a designated digital wallet address 

to fund the business, which included creating and supporting a platform for the IHT token, and 

business development and operations.  

224. Specifically, according to IHT’s Bittrex listing application, investor funds would be 

pooled and used as follows:  

• 10% legal fees on token sale raising 

• 10% domestic and international publicity and ecological construction 

• 15% existing R&D team’s operation 

• 15% recruiting new R&D operators 

• 50% prepaying the tokenized assets to speed up assets acquisition  

225. Moreover, at least 15% of tokens would be reserved for Aladdin staff and employees 

for compensation purposes or incentives.   

226. The price of all IHT tokens goes up or decreases together.   

Investors in IHT reasonably expected to profit from the efforts of others. 

227. The whitepaper outlined a plan and timeline for development and growth of various 

aspects of the supposed business model, including an official “launch event” in Hong Kong, 

“Blockchain Summit Forum” marketing events in the United States and elsewhere, and global 

expansion.   

228. The whitepaper also highlighted the purported expertise of the team behind IHT, 

including its technical and engineering expertise.  Members of the team were also marketed as experts 

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 50 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 51 -                            (212) 336-1100 

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in “blockchain,” with titles such as “blockchain consultant” and “Chief Blockchain Officer” with 

purportedly deep industry knowledge and experience. 

229. Moreover, the whitepaper indicated that real estate developers and financial institutions 

have shown “great enthusiasm” and are “willing to actively participate in the i-house.com project and 

look forward to the i-house.com blockchain project IHT on-line as soon as possible.”  

230. After the ICO, the company continued to make statements highlighting the efforts it 

was taking to develop the business using proceeds from the token sale.  For example, in April 2018, 

following a period of decline in the crypto asset market, the CEO and founder of Aladdin/I-House 

reiterated IHT’s plans for expansion into global markets and noting that “[o]ur hope is that investors 

will not worry about market fluctuations and continue to support IHT.  Our vision for the world’s first 

real estate blockchain transaction cloud platform, is to become a leader in the blockchain industry and 

to develop our own unique business model, despite market influxes.”  He concluded:  “We will 

continue to work hard no matter what lies ahead to position IHT as a leader in the blockchain 

industry.”  The company also offered a “reward” program that encouraged IHT investors to “lock up” 

their IHT tokens and rewarded this “lock up” with additional IHT tokens. 

IV. BITTREX AND BITTREX GLOBAL WERE REQUIRED TO REGISTER AS A 
NATIONAL SECURITIES EXCHANGE, AND BITTREX WAS ALSO REQUIRED 
TO REGISTER AS A BROKER-DEALER AND CLEARING AGENCY. 

231. Throughout the Relevant Period, Bittrex, and since 2019 Bittrex and Bittrex Global, 

used the means and instrumentalities of interstate commerce to bring together the orders of multiple 

buyers and sellers of crypto assets that were offered and sold as securities using a trading facility 

programmed with non-discretionary rules for orders to interact and buyers and sellers to agree upon the 

terms of trades in these securities.  As a result, Bittrex and Bittrex Global, as a group of persons, 

maintained and provided a market place for bringing together purchasers and sellers of securities.  

Bittrex and Bittrex Global were therefore required to register with the Commission as a national 

securities exchange or operate pursuant to an exemption to such registration, but did not do so. 

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 51 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 52 -                            (212) 336-1100 

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232. Throughout the Relevant Period, Bittrex used means and instrumentalities of interstate 

commerce to engage in the business of effecting transactions in securities for the account of others by, 

for example, soliciting potential investors in crypto asset securities, holding itself out as a place to buy 

and sell crypto asset securities, facilitating trading in crypto asset securities by opening customer 

accounts and handling customer funds and crypto asset securities (which it commingled and treated as 

fungible) through Bittrex-controlled accounts and digital wallets, and being compensated for doing so.  

Bittrex was therefore required to register with the Commission as a broker-dealer, but did not so 

register.  

233. Throughout the Relevant Period, Bittrex served as an intermediary in settling 

transactions in crypto asset securities occurring on the Bittrex Platform.  Bittrex also acted as a 

custodian of securities by allowing crypto asset securities to be deposited in Bittrex-controlled wallets, 

creating a system for the central handling of securities whereby securities were treated as fungible and 

customer accounts debited and credited by Bittrex to settle its customers’ transactions.  Bittrex was 

therefore required to register with the Commission as a clearing agency, but did not so register. 

FIRST CLAIM FOR RELIEF 
Violations of Exchange Act Section 5 

(Bittrex and Bittrex Global) 

234. The Commission realleges and incorporates by reference here the allegations in 

paragraphs 1 through 233. 

235. By engaging in the acts and conduct described in this Complaint, Bittrex and Bittrex 

Global together met the definition of “exchange” and, directly or indirectly, made use of the mails and 

the means and instrumentalities of interstate commerce for the purpose of using any facility of an 

exchange within or subject to the jurisdiction of the United States, to effect transactions in a security, or 

to report any such transaction, without registering as a national securities exchange under Exchange Act 

Section 6 [15 U.S.C. § 78f], and without being exempted from such registration. 

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 52 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 53 -                            (212) 336-1100 

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236. By reason of the conduct described above, Bittrex and Bittrex Global, directly or 

indirectly, violated, are violating, and, unless enjoined, will continue to violate Exchange Act Section 5 

[15 U.S.C. § 78e]. 

SECOND CLAIM FOR RELIEF 
Violations of Exchange Act Section 15(a) 

(Bittrex) 
 

237. The Commission realleges and incorporates by reference here the allegations in 

paragraphs 1 through 233. 

238. By engaging in the acts and conduct described in this Complaint, Bittrex, a person other 

than a natural person under the Exchange Act, is a broker and made use of the mails and the means 

and instrumentalities of interstate commerce to effect transactions in, or to induce or attempt to induce 

the purchase or sale of, securities, without registering as a broker, and without being exempted from 

such registration. 

239. By reason of the conduct described above, Bittrex, directly or indirectly, violated, is 

violating, and, unless enjoined, will continue to violate Exchange Act Section 15(a) [15 U.S.C. § 78o(a)]. 

THIRD CLAIM FOR RELIEF 
Violations of Exchange Act Section 17A(b) 

(Bittrex) 
 

240. The Commission realleges and incorporates by reference here the allegations in 

paragraphs 1 through 233. 

241. By engaging in the acts and conduct described in this Complaint, Bittrex, directly or 

indirectly, made use of the mails and the means and instrumentalities of interstate commerce to 

perform the functions of a clearing agency with respect to securities, without registering in accordance 

to Section 17A(b) of the Exchange Act and without being exempted or excluded from such 

registration. 

242. By reason of the conduct described above, Bittrex, directly or indirectly, violated, is 

violating, and, unless enjoined, will continue to violate Exchange Act Section 17A(b) [15 U.S.C. § 78q-

1(b)]. 

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 53 of 56

https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=15-USC-1743324417-481887771&term_occur=999&term_src=
https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=15-USC-3522631-481887771&term_occur=999&term_src=


 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 54 -                            (212) 336-1100 

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FOURTH CLAIM FOR RELIEF 
Violations of Exchange Act Sections 5, 15(a), and 17A(b) 

(Shihara as Control Person over Bittrex) 
 

243. The Commission realleges and incorporates by reference here the allegations in 

paragraphs 1 through 233. 

244. As alleged above, Bittrex violated Exchange Act Sections 5, 15(a), and 17A(b) [15 

U.S.C. §§ 78e, 78o(a), 78q-1(b)]. 

245. Shihara was a control person of Bittrex for purposes of Exchange Act Section 20(a) [15 

U.S.C. § 78t(a)] at least through November 2019. 

246. At all relevant times, Shihara exercised power and control over Bittrex, including by 

managing and directing Bittrex, and by directing and participating in the acts constituting Bittrex’s 

violations of the securities laws. 

247. By reason of the foregoing, Shihara is liable as a control person under Exchange Act 

Section 20(a) [15 U.S.C. § 78t(a)] for Bittrex’s violations of Exchange Act Sections 5, 15(a), and 17A(b) 

[15 U.S.C. §§ 78e, 78o(a), 78q-1(b)].  Shihara is, therefore, jointly and severally liable with and to the 

same extent as Bittrex for violations of Section 5, 15(a), and Section 17A(b) of the Exchange Act. 

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that the Court enter a Final Judgment:  

I. 

Permanently enjoining Defendants, and each of their respective agents, servants, employees, 

attorneys and other persons in active concert or participation with any of them, from violating, directly 

or indirectly, Section 5 of the Exchange Act [15 U.S.C. § 78e]; and Bittrex and Shihara, and each of 

their respective agents, servants, employees, attorneys and other persons in active concert or 

participation with any of them, from violating Sections 15(a) and 17A(b) of the Exchange Act [15 

U.S.C. §§ 78o(a), 78q-1(b)]; 

 

 

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 54 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 55 -                            (212) 336-1100 

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II. 

Ordering Defendants to disgorge on a joint and several basis all ill-gotten gains, with 

prejudgment interest thereon, pursuant to Sections 20(a), 21(d)(3), 21(d)(5) and 21(d)(7) of the 

Exchange Act [15 U.S.C. §§ 78u(a), 78u(d)]; 

III. 

Prohibiting, pursuant to Section 21(d)(5) of the Exchange Act [15 U.S.C. § 78u(d)(5)], Bittrex 

and Shihara from continuing to use means or instrumentalities of interstate commerce to (i) accept and 

display orders in crypto asset securities from U.S. persons, (ii) act as broker or dealer with respect to 

crypto asset securities, or (iii) perform the functions of  a clearing agency with respect to crypto asset 

securities, without registering with the Commission; and Bittrex Global from continuing to use means 

or instrumentalities of interstate commerce to accept orders in crypto asset securities from U.S. 

persons; 

IV. 

Ordering Defendants to pay civil money penalties pursuant to Section 21(d)(3) of the Exchange 

Act [15 U.S.C. § 78u(d)(3)]; and 

  

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 55 of 56



 

Complaint Securities and Exchange Commission 
SEC v. Bittrex, Inc., et al. New York Regional Office 
Case No. 23-cv-580        100 Pearl Street, Suite 20-100 
              New York, New York 10004 
       - 56 -                            (212) 336-1100 

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V. 

 Granting any other and further relief this Court may deem just and proper for the benefit of 

investors. 

JURY DEMAND 

 The Commission demands trial by jury. 

Dated: New York, New York   
 April 17, 2023      

      By: s/Jorge G. Tenreiro 
      Jorge G. Tenreiro* 
 
      By: s/Ladan F. Stewart 

Ladan F. Stewart* 
 
By: s/Christopher J. Carney 

      Christopher J. Carney* 
       
      By: s/Ben N. Kuruvilla 
      Ben N. Kuruvilla* 
 

*Conditionally admitted pursuant to  
Local Rule 83.1 
SECURITIES AND EXCHANGE 
COMMISSION 
New York Regional Office 
100 Pearl Street, Suite 20-100 
New York, New York 10004 
(212) 336-1100 
Email: [email protected] 
[email protected] 
[email protected] 
[email protected] 
 
Attorneys for the Plaintiff 
 
 

 Of Counsel:   David L. Hirsch 
Mark R. Sylvester 
Pamela Sawhney 

  Daphna Waxman 
 
 

Case 2:23-cv-00580   Document 1   Filed 04/17/23   Page 56 of 56


	SUMMARY
	VIOLATIONS
	NATURE OF THE PROCEEDING AND RELIEF SOUGHT
	JURISDICTION AND VENUE
	DEFENDANTS
	STATUTORY AND LEGAL FRAMEWORK
	BACKGROUND ON CRYPTO ASSETS AND CRYPTO TRADING PLATFORMS
	FACTS
	I. The Bittrex Platform
	II. Through the Bittrex Platform, Bittrex and Bittrex Global Provide Exchange Services to U.S. Customers, and Bittrex also Provides BrokerAGE and Clearing Services to U.S. Customers.
	A. Bittrex Solicits Customers.
	B. Bittrex Holds and Controls Customers’ Funds and Crypto Assets.
	C. Through the Bittrex Platform, Bittrex and Bittrex Global Together Maintain and Provide a Marketplace for Trading Crypto Assets.
	D. Bittrex Settles Customers’ Trades.
	E. Bittrex Charges Fees on Executed Trades.
	III. The Crypto Assets Traded on the Bittrex Platform Include Assets that Were Offered and Sold as Securities.
	A. In an Effort to Maximize Its Trading Profits, Bittrex Added Crypto Assets to the Bittrex Platform Despite Regulatory Concerns, While Coordinating a Campaign to “Scrub” Potentially Problematic Public Statements About These Assets.
	B. The Bittrex Platform Makes Available for Trading Assets that Were Offered and Sold as Securities.
	IV. Bittrex and Bittrex Global Were Required to Register as a National Securities Exchange, and Bittrex Was Also Required to Register as a Broker-DEALER and Clearing Agency.

	FIRST CLAIM FOR RELIEF
	Violations of Exchange Act Section 5
	(Bittrex and Bittrex Global)
	SECOND CLAIM FOR RELIEF
	THIRD CLAIM FOR RELIEF
	FOURTH CLAIM FOR RELIEF
	PRAYER FOR RELIEF
	JURY DEMAND