- Bittrex files for Chapter 11 bankruptcy after announcing plans to close down U.S. operations due to regulatory uncertainty.
- Cryptocurrency trading platform joins Celsius and Voyager in filing for bankruptcy.
- Bittex owes the OFAC $29 million for settlement fees.
- Bittrex filed for Chapter 11 bankruptcy for all of its entities except one of its global entities.
- The SEC continues to create regulatory uncertainty.
Well-known cryptocurrency trading platform Bittrex has recently filed for Chapter 11 bankruptcy protection in the Delaware district. Bittrex estimated more than 100,000 creditors, with assets between $500 million and $1 billion, alongside $500 million and $1 billion in liabilities.
Bittrex bankruptcy filing covers their Seattle-based entity Bittrex inc, two Bittrex entities in Malta, and another affiliated entity Desolation Holdings LLC.
However, their Liechtenstein-based global entity for exchange, Bittrex Global GmbH, was not included in the bankruptcy filing made by Bittrex for reasons that need to be disclosed.
The trading platform’s declaration came shortly after the United States Securities and Exchange Commission charged the firm and its co-founder, the company’s former CEO, William Shihara, for violating securities laws in April.
The Securities and Exchange Commission accused Bittrex Inc and Bittrex Global of operating an unregistered securities exchange in October 2022.
The trading platform also received charges for violating the Bank Secrecy Act from the United States Treasury’s Office of foreign assets control (OFAC) and the financial crimes enforcement network (FinCEN). It reached a settlement to pay $29 million.
The settlement Bittrex owes the United States Treasury Office of Foreign Assets Control (OFAC) places them as the largest creditor listed on the trading platform’s bankruptcy filing, with $24.2 million put down as a claim for the OFAC. The trading platform’s second largest creditor is a crypto wallet, with Bittrex owing them a whopping $14.5 million.
The Financial crimes enforcement network (FinCEN) is also listed as one of Bittrex’s top 50 creditors, with a claim of $3.5 million. The Securities and Exchange Commission was put down with undetermined claims.
The SEC’s regulatory enforcement and the trading platform’s recent bankruptcy filing comes shortly after the trading platform announced in March the intention to close down their U.S. operations due to the current regulatory uncertainty crypto firms in the United States have continued to face, with a lot of firms making a move to close down operations in the country.
Conclusion
Bittrex has had a challenging year in the United States crypto industry, with the exchange having to cut off 83 of their workers in February due to the crypto market downtime that was brought on by the collapse and bankruptcy filing of other more significant crypto firms, with FTX starting the chaos in November 2022.
Bittrex joins other crypto exchanges and lending platforms like FTX, BlockFi, Voyager Digital, and Celsius that have recently filed for Chapter 11 bankruptcy.
Cointelegraph contacted the trading platform’s CEO, Oliver Linch, but he has not commented on the bankruptcy filing.
