Crypto Investment Firm Paradigm Challenges SEC's Jurisdiction in Bittrex Lawsuit
Prominent crypto investment firm Paradigm has challenged the US Securities and Exchange Commission's authority to regulate secondary markets for crypto assets.
The company has filed an amicus brief in the SEC's case against cryptocurrency exchange Bittrex, challenging the regulator's attempt to expand its jurisdiction over crypto secondary markets, Paradigm's special counsel Rodrigo Seira said in a recent statement.
In the legal document submitted to the court, Paradigm argued that the SEC's claims against Bittrex and other crypto exchanges are fundamentally different from its previous cases against token sellers.
While the SEC previously sought to regulate fundraising schemes under the Howey test, Paradigm noted that the agency is now attempting to extend its authority to include downstream sales of crypto assets.
"The SEC’s lawsuit against Bittrex is the first of three cases that the SEC has brought in rapid succession against crypto exchanges," Seira wrote in the blog post.
As reported, last month, the SEC sued both Binance, the world's largest cryptocurrency exchange, and Coinbase, the largest US-based cryptocurrency exchange.
"Through these actions, the SEC is wrongfully attempting to lay claim over crypto secondary markets."
Bittrex, a Seattle-based exchange, announced in early April that it would wind down US operations due to the challenging regulatory and economic environment in the country.
Shortly after, the SEC charged Bittrex, its co-founder and former CEO William Shihara, and its foreign affiliate Bittrex Global for operating an unregistered national securities exchange, broker, and clearing agency.
The agency claimed that Bittrex had facilitated the buying and selling of crypto assets since at least 2014,
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