A recent court filing has revealed that the US subsidiary of crypto exchange Bittrex has filed a request for dismissal of the lawsuit brought forward against it by the US Securities and Exchange Commission (SEC).
According to lawyers of Bittrex, the securities regulator does not have the authority of regulating the crypto space before getting approval from Congress.
The Securities and Exchange Commission (SEC) filed a lawsuit against the Bittrex crypto exchange in mid-April 2023.
As per the allegations of the SEC, Bittrex had been operating an unregistered brokerage, exchange, and clearing agency.
Gary Gensler, the chairman of the SEC, had said at the time that they were going to hold the company accountable due to its non-compliance.
The US subsidiary of Bittrex filed for chapter 11 bankruptcy two weeks after the lawsuit was filed. In its latest court filing, the exchange has asked for the dismissal of the lawsuit filed by the SEC.
According to the attorneys of the crypto exchange, labeling crypto tokens as securities is a ‘major question’ in the US and it remains unanswered because there is no clear definition.
Bittrex has also asserted that sufficient notice was not provided by the SEC about the violations that it has allegedly committed when it comes to securities law.
The lawyers of the Bittrex exchange have also criticized the regulatory body for investigating it for six years without being able to identify even one crypto asset token listed unlawfully until this year.
In the request filed for dismissal of the SEC lawsuit, the crypto exchange noted that even now, the securities regulator has not presented some important elements of its claims.
Three reasons have been mentioned in the filing in which the crypto exchange has filed for the dismissal of the lawsuit.
First off, it has mentioned that it needs to be determined whether securities regulations are applicable to crypto tokens, as the SEC claims.
The lawyers have stated that congressional leaders need to attend to this matter and it should not be solely determined by the court or the SEC.
Secondly, Bittrex has also asserted that there is no substantial evidence provided by the SEC to support the claim of the exchange being used for conducting secondary-market transactions related to securities.
The third reason that the attorneys have mentioned is the fact that there was no proper notification given to Bittrex about the alleged misconduct.
The request for the dismissal of the lawsuit from Bittrex is also in line with the attempt made by Coinbase in its own legal tussle with the SEC.
The crypto exchange recently submitted a document of 177 pages in which it has highlighted that the enforcement actions taken by the SEC are in violation of the constitutional separation of powers and due process.
A similar sentiment has been presented in the argument that Bittrex has made, as it also believes that the SEC has not received authorization from the Congress to apply securities laws to crypto tokens.