Paradigm Challenges SECs in Bittrex Case with Amicus Brief – A Settlement to Previous Lawsuits

Paradigm Challenges SECs in Bittrex Case with Amicus Brief – A Settlement to Previous Lawsuits

Paradigm challenges SEC in Bittrex case with amicus brief

The Securities and Exchange Commission (SEC) is once again in the spotlight as crypto investment firm Paradigm challenges the regulator over its actions against cryptocurrency exchange Bittrex.

Paradigm claims that the SEC overstepped its own regulatory authority by slapping Bittrex with a lawsuit for violating the Howey Examination. The Howey test is a legal standard in the United States used to determine whether a business can be classified as an investment transaction.

The investment firm argues that the SEC does not have the authority to take additional actions in the crypto market because these do not constitute “investment contracts” and therefore do not fall under the SEC’s jurisdiction.

The company also relies on a statement from SEC Chairman Gary Gensler, who acknowledged the lack of a strong regulatory platform for crypto assets. Paradigm claims that Gensler's statement reinforces the disagreement that the lawsuit against Bittrex is unwarranted and based on regulatory overreach.

Rodrigo Seira, the co-founder of Paradigm, further emphasized that the SEC’s allegations against Bittrex are significantly different from previous cases. Previous SEC lawsuits against token issuers were based on the Howey test, while the allegations against Bittrex represent a different approach.

Paradigm has already expressed support for another crypto institution, Coinbase, which is also facing a lawsuit from the SEC. In an amicus brief, Paradigm called on the SEC to provide clear regulations for electronic resources companies.

Bittrex filed its own Florida money transmitter certificate to comply with regulatory requirements. Nevertheless, the company became bankrupt on May 30th.

Paradigm calls for clear regulation and support from the SEC for companies in the crypto space. The company argues that the SEC's current approach is inadequate and does not provide helpful options for companies to comply.

The lawsuit against Bittrex and the challenge from Paradigm continue to raise questions about cryptocurrency regulation. It remains to be seen how the SEC will respond to the criticism and whether regulation will change in the future.