Bittrex has asked a federal court to undo the $24 million settlement it paid the Securities and Exchange Commission in 2023, arguing the SEC has abandoned the legal theory that underpinned the enforcement action.
In a motion filed Monday, attorneys for the bankrupt Seattle-based exchange asked a judge to vacate the earlier judgment and order the SEC to return the $24 million. Bittrex says the SEC has “conceded that its legal theory was wrong” — specifically, the claim that the tokens traded on the exchange were securities — and has since dropped or paused nearly all comparable enforcement actions and investigations into crypto exchanges and token issuers.
The SEC sued Bittrex during the Biden administration, alleging the platform offered unregistered securities through token trading services. Bittrex settled the case in 2023 for $24 million without admitting or denying the allegations, and the exchange suspended U.S. operations shortly afterward, saying the regulatory and economic environment made continued business in the U.S. unviable.
Court filings also note an SEC request in March to transfer the $24 million to the U.S. Treasury for distribution to former Bittrex customers whom regulators say may have suffered losses. Bittrex’s lawyers now ask the court to halt that transfer and return the funds before any distribution occurs.
The motion frames the continued enforcement of the settlement as inconsistent and unfair given the agency’s shift in stance under new leadership. Since President Trump’s return to office, SEC officials have publicly moved away from the aggressive crypto enforcement posture adopted earlier, dismissing or pausing several high-profile cases and signaling that many digital assets likely fall outside securities laws.
Bittrex’s legal troubles extend beyond the SEC matter. In 2022 the exchange settled a separate case with the U.S. Treasury, agreeing to pay roughly $29 million over alleged sanctions and anti-money-laundering violations involving jurisdictions such as Iran, Cuba and Syria.
What happens next will depend on the judge’s response to Bittrex’s motion. If the court vacates the judgment and orders the funds returned, it could create a notable precedent in how past crypto enforcement settlements are handled amid shifting regulatory views. If denied, the SEC may proceed with its proposed redistribution of the settlement to affected customers.
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