The lawsuit says Mr Shihara was notified by an employee there were “some controversial statements for [the Power Ledger] offering”.
Power ‘revolution’
Power Ledger co-founder Jemma Green successfully sued The Australian Financial Review in 2021 for defamation over two articles reporting on Power Ledger’s $34 million sale of tokens in 2017. At the time it was the biggest sale, or initial coin offering, of its type in Australia.
Jemma Green, co-founder of Power Ledger. Trevor Collens
Before the sale, Power Ledger said an electricity revolution would “take control out of the hands of central players” and put “everyday citizens in charge”.
Its blockchain technology was designed to allow consumers to trade power among themselves.
If the system became popular, Power Ledger’s tokens, which traded under the ticker POWR, were likely to increase in price. They sold for 24¢ on Tuesday, and are down 60 per cent over the past five years, according to Morningstar.
Power Ledger didn’t respond to an emailed request for comment.
The company is not the only cryptocurrency issuer named in the 56-page lawsuit, which alleges that Bittrex asked crypto companies to delete public information that made their tokens sounds like investments, including references to shares, profits and dividends. Other tokens cited include OMG, DASH, ALGO, TKN, NGC and IHT.
Customer complaints
US stock exchanges and brokers are subjected to strict regulation. Crypto exchanges are lightly regulated, and don’t have to take special precautions to protect investors’ assets, such as holding them in separate accounts.
In a private conversation cited by the SEC, a Bittrex employee complained about customers upset they weren’t told when their cryptocurrencies were removed from the trading platform.
“I hate people bitching that we don’t email them about market removals … I LOST SO MUCH CAUSE I DIDn’T KNOW,” the person wrote.
One of the company’s three founders replied that investors should “go f— themselves”.
The bankruptcy doesn’t affect Bittrex’s non-US business, Bittrex Global, which was still available in Australia on Tuesday, and is also being sued by the SEC.
Bittrex Global chief executive Oliver Linch said the company had no US customers, and complained the SEC hadn’t contacted it before filing the lawsuit on April 17.
“Bittrex Global is always willing to work productively with regulators,” he said. “But we are disappointed to say that the SEC does not seem interested in having constructive conversations.”
