Crypto Giant Paradigm Enters the Bittrex Lawsuit Arena

  • Paradigm, a company known for its significant investments in decentralized finance companies, has intervened as an expert in the ongoing “unregistered securities sale case” between the SEC and Bittrex.
  • Paradigm argues that the SEC does not have the right to intervene in secondary markets (OTCs, centralized and decentralized exchanges).
  • Paradigm also criticizes SEC Chairman Gary Gensler, stating that the SEC now seems to believe it has authority that Gensler previously stated it did not have.

Paradigm Intervenes in SEC-Bittrex Case

Paradigm, a company recognized for its substantial investments in decentralized finance companies, has stepped in as an expert in the ongoing legal dispute between the Securities and Exchange Commission (SEC) and the Bittrex exchange. Paradigm asserts that the SEC does not possess the authority to meddle in secondary markets, such as over-the-counter markets, centralized exchanges, and decentralized exchanges.

Shift from Primary to Secondary Markets

According to documents shared by Paradigm’s legal advisor Rodrigo Seira, the company claims that the SEC’s statements towards Bittrex and other crypto exchanges fundamentally deviate from its previous statements towards initial token sellers. The SEC initially sought to regulate funding systems under the Howey test in many cases. However, Paradigm observes that the SEC now appears to want to extend its regulatory boundaries to secondary markets as well, claiming jurisdiction over these markets.

Gensler’s Changing Stance on SEC Authority

Paradigm also made critical comments about SEC Chairman Gary Gensler. Referring to a speech Gensler made in 2021, Paradigm noted in its court documents that Gensler had stated that the SEC did not have the authority to regulate secondary markets. Despite no legal changes in this area since then, Paradigm argues that the SEC’s actions indicate that the agency now believes it possesses the authority that Gensler previously denied.

Secondary Markets and the Howey Test

In its court opinion, Paradigm further argued that there is no legal basis for viewing a token sold through an ICO as an investment contract, or for viewing transactions in secondary markets where this token is sold as “investment contract transactions.” Over the past six years, the SEC has opened dozens of cases and sued individuals who sold crypto assets through initial funding sales. Some courts have agreed with the SEC, stating that these are investment contracts under the Howey test. However, other courts have recognized the difference between token sales and third-party market sales of tokens, ruling that the Howey test does not cover transactions between third parties in secondary markets. Therefore, Paradigm asserts that the theories produced by the SEC are unprecedented and lack precedent.

In conclusion, Bittrex had already announced it would end its operations in the US a few weeks before the SEC filed its lawsuit. The SEC’s decision to sue a company that was certain to exit the country was heavily criticized. Bittrex also filed for bankruptcy in May.

BREAKING NEWS

Walmart to Enable Bitcoin Payments Through OnePay Cash in New Crypto App with Zerohash Partnership

CNBC reported on October 21 that Walmart is examining...

Bitcoin at the 21-Week Moving Average: Key Trend Threshold for Breakout or Deeper Pullback

Matrixport notes that the 21-week moving average has re-emerged...

Bitcoin Short Position Reaches $103M as Andrew Kang’s Address Adds to BTC Exposure, Driving Total Notional Toward $1.33B

According to HyperInsight monitoring, a linked crypto wallet built...

BTC AI Trading Showdown: Six Models Start with $10,000 Each in Perpetual Contracts on Hyperliquid

COINOTAG News reports, on October 21, that CoinBob’s on-chain...

Ethereum Long Near Liquidation as Buddy Account Expands to $10M with 25x Increase and USDC Margin Deposits

According to on-chain data, COINOTAG News reports that the...
spot_imgspot_imgspot_img

Related Articles

spot_imgspot_imgspot_imgspot_img

Popular Categories

spot_imgspot_imgspot_img