According to Decrypt reports and related court documents, the shuttered crypto exchange Bittrex filed a motion to dismiss with the U.S. District Court for the Western District of Seattle this week. It seeks to overturn its 2023 settlement with the U.S. Securities and Exchange Commission (SEC), and asks the SEC to refund the $24 million civil penalty already paid.
Key points in the motion to dismiss
According to a Decrypt report, in the motion filed on Monday, Bittrex’s lawyers argued that after the SEC treated the tokens as securities as its legal basis, and after the SEC obtained a settlement from a bankrupt crypto exchange, it has:
· Acknowledged that its original legal theory for deeming tokens as securities was wrong
· Acknowledged that its enforcement strategy was off course from the start
· Dismissed nearly all lawsuits and investigations involving crypto companies
Bittrex’s lawyers now ask the judge to order the immediate return of the $24 million before the SEC transfers the funds to the U.S. Department of the Treasury and distributes compensation to former customers.
SEC crypto policy shift: regulatory framework changes under Trump
Based on public records, after the Trump administration took office, under current SEC Chair Paul Atkins, the SEC has clearly stated that the vast majority of crypto tokens do not constitute securities, and it has withdrawn nearly all lawsuits against crypto firms and exchanges, including Coinbase and Ripple. The SEC also established a crypto working group (Crypto Task Force) led by Hester Peirce, and reached a regulatory cooperation agreement with the U.S. Commodity Futures Trading Commission (CFTC).
Background of the 2023 settlement case and current status of the $24 million transfer
According to Decrypt reports, in 2023, the SEC brought a lawsuit against Bittrex for operating without registering as a national securities exchange, broker, and clearing agency. Bittrex and former CEO William Shihara reached a settlement, paying $24 million (including $14.4 million in profits and interest, with the remainder as a penalty). Neither side admitted or denied the allegations. Bittrex also officially shut down after filing for Chapter 11 bankruptcy protection under the U.S. Bankruptcy Code in May of the same year.
In addition, Bittrex previously separately paid $29 million to the U.S. Department of the Treasury as a penalty for clear violations of sanctions against Iran, Cuba, and Syria.
According to Decrypt reports, in March 2026, the SEC under the Trump administration initiated procedures to transfer the $24 million to the Treasury, with plans to distribute compensation to former Bittrex customers who suffered losses.
FAQ
What is the core legal basis for Bittrex’s request to dismiss the SEC settlement?
According to Decrypt reports, Bittrex’s lawyers cite the SEC policy shift during the Trump administration, arguing that the SEC has publicly acknowledged its original legal theory was wrong, that its enforcement strategy was off course, and that it has withdrawn nearly all lawsuits against crypto companies—therefore, Bittrex should be entitled to corresponding relief.
What is the current legal status of the $24 million?
According to Decrypt reports, in March 2026, the SEC has initiated procedures to transfer the funds to the U.S. Department of the Treasury, with plans to distribute compensation to former Bittrex customers. Bittrex’s lawyers are now asking the court to order a refund before the transfer of funds is completed.
How has the SEC responded to Bittrex’s motion to dismiss?
According to Decrypt reports, the SEC declined to comment on the ongoing legal proceedings.
