The Crypto exchange and company, Bittrex, has finally filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware weeks after the US SEC charged it for operating an unregistered crypto trading platform.
In a statement on Monday, May 8th, Bittrex said that it had filed for bankruptcy protection in a Delaware court after ceasing all US operations on April 30th. According to the statement, the bankruptcy will not affect its global operations outside the United States. The exchange stated:
“Having previously announced that Bittrex, Inc. would be ceasing all operations in the U.S. effective April 30th, we have now made the decision to file Chapter 11 bankruptcy in federal court in Delaware. This announcement does not impact Bittrex Global, which will continue operations as normal for its customers outside the U.S.”
Bittrex Disturbed History in the US
The exchange was the top US exchange in 2017, with a daily trading volume of $3.1 billion at its peak. As Blockchain Journal reported, Seattle-based cryptocurrency exchange company Bittrex was already set to exit the United States amid regulatory pressure and legal challenges. On April 1st, 2023, the exchange officially announced its decision to wind down its US operations until April 30th.
Despite this announcement, on April 17th, 2023, SEC charged the crypto trading platform and its cofounder and former CEO William Shihara for operating an unregistered securities exchange. As per the claims of the US securities regulator, OMG, Algorand (ALGO), Monolith (TKN), Naga (NGC), IHT Real Estate Protocol (IHT), and Dash (DASH) tokens traded on Bittrex were unregistered securities.
But that’s not all. In October last year, the exchange agreed to pay $29 million after receiving charges for the Bank Secrecy Act violations from the US Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN). It also faced investigations for the deficiencies in its money laundering and sanction compliance program.
Now the exchange has finally deiced to get rid of the pain by filing for Chapter 11 bankruptcy protection. This bankruptcy covers its Seatle-based entity, two entities in Malta, and an affiliated entity Desolation Holdings LLC. The Liechtenstein-based global entity Bittrex Global is not included in the filing.
The co-founder and current CEO Richie Lie expressing his disappointment, said:
“Yes, we filed chap 11. Yes, we still have 100% of all customer funds. Yes, there will be a claims process through the bankruptcy courts. This was the cleanest way to bury the baby – RIP @BittrexExchange”
According to May 8th court filing, the exchange’s assets and liabilities were both between $500 million and $1 billion, and an estimated more than 100,000 creditors.
