• Bittrex US has filed for Chapter 11 bankruptcy protection in the US.
• The filing comes a month after the SEC charged Bittrex with securities regulations violations.
• The bankruptcy filing involves assets and liabilities of $1 billion each, and more than 100,000 creditors.
Bittrex US Files for Chapter 11 Bankruptcy
Bittrex US, a cryptocurrency exchange, has officially filed for Chapter 11 bankruptcy protection in the United States. The development follows a lawsuit from the US Securities and Exchange Commission (SEC) which accused Bittrex of repeatedly breaking security regulations in the country.
Details of Bankruptcy Filing
The Bankruptcy filing was submitted on May 8 to the United States Bankruptcy Court for the District of Delaware. Bittrex reported that it has $500 million to $1 billion in assets, $500 to $1 billion in liabilities and more than 100,000 creditors. The Liechtenstein-based global trading exchange firm Bittrex Global GmbH is not involved with this bankruptcy protection filing – it only applies to Bittrex US and its affiliates.
SEC’s Lawsuit Against Bittrex
In April 2021, shortly before the bankruptcy filing was made, the SEC had filed a lawsuit against Bittrex in Federal court alleging that the exchange had violated securities regulations from 2017 through 2022 generating at least $1.3 billion in revenue. The SEC also specified three tokens (ALGO, OMG and DASH) as unregistered securities.
Withdrawal of Funds by Users
Days prior to this bankruptcy filing, users were informed by Bittrex US to withdraw funds from their accounts due to regulatory restrictions imposed by some states such as New York and Washington where withdrawals were suspended indefinitely since February 2021 due to licensing issues with state regulators like NYDFS (New York Department of Financial Services).
Context Regarding Decision To File For Chapter 11
Biretx Global took to Twitter on May 9th seeking “to provide some more context regarding its decision” regarding the chapter 11 bankruptcy filing: “We understand this news may be concerning but we want our customers to know that we are doing everything possible to maximize recovery values while ensuring all customer funds remain safe”