- A U.S. bankruptcy judge allowed Bittrex to receive a loan from its parent company.
- Bittrex will also attempt to obtain an additional $12 million by requesting a second loan.
Bittrex has received approval from a bankruptcy judge in the United States for a $7 million loan from its parent company, Aquila Holdings.
Judge Brendan Shannon said during a trial that Bittrex will be permitted to get 250 BTC worth $7 million, Reuters reported.
In a hearing later in June, Bittrex will also attempt to obtain 450 BTC worth $12 million by requesting a second loan. If this credit request gets accepted, the aggregate sum of the loan will be $19 million.
Despite Bittrex’s claim that it can repay all customers in cryptocurrency, the loan is said to only facilitate its bankruptcy without any problems.
Enforcement action makes Bittrex quit U.S. operations?
It was only in the last week that the exchange filed for Chapter 11 bankruptcy in the District of Delaware.
The bankruptcy affected its Seattle-based entity Bittrex, Inc, besides two Bittrex enterprises in Malta and a related entity called Desolation Holdings LLC.
However, Bittrex Global GmbH, its global exchange headquartered in Liechtenstein, was not mentioned in the petition.
Last month, the company and its co-founder and former CEO William Shihara were charged by the Securities and Exchange Commission (SEC) for violations. Bittrex, Inc. and Bittrex Global operated an unregistered securities exchange, according to the SEC.
The exchnage was likewise charged with Bank Mystery Act infringement by the U.S. Depository’s Office of Unfamiliar Resources Control (OFAC) and the Monetary Violations Implementation Organization (FinCEN) in October, and consented to pay about $29 million in a settlement.
The exchange had stated in March that it will cease operations in the U.S. by 30 April, citing persistent regulatory uncertainties in the country.
Readers should know that Judge Shannon specifically agreed to permit the Bitcoin loan due to its distinct features, such as its low interest rate and volatility protections. When Bittrex repays the loan, it will not be required to repay more than 110% of Bitcoin’s current value.
