Bittrex files for Chapter 11 bankruptcy following SEC enforcement, more inside
- Bittrex, a cryptocurrency trading platform, has filed for Chapter 11 bankruptcy in the District of Delaware.
- In April, the SEC charged the company and its co-founder and former CEO, William Shihara, with securities violations.
Bittrex, a cryptocurrency trading platform, has filed for Chapter 11 bankruptcy in the District of Delaware.
Bittrex has over 100,000 creditors, $500 million to $1 billion in assets, and $500 million to $1 billion in liabilities. This information came forth during the bankruptcy proceedings in a filing made in the United States Bankruptcy Court for the District of Delaware on 7 May.
According to Bittrex’s statement:
“While the Bankruptcy Court will ultimately decide the method by which those funds can be claimed by and distributed to our customers, we intend to ask the court to activate those accounts as soon as possible so that customers meeting the necessary regulatory requirements will be able to withdraw them.”
The bankruptcy affects its Seattle-based entity Bittrex, Inc, as well as two Bittrex businesses in Malta and a related entity, Desolation Holdings LLC. However, the petition did not include Bittrex Global GmbH, a global exchange based in Liechtenstein.
Bittrex facing SEC action as well
In April, the Securities and Exchange Commission (SEC) charged the company and its co-founder and former CEO, William Shihara, with securities violations.
According to the SEC, Bittrex, Inc. and Bittrex Global ran an unregistered securities exchange. The exchange was also charged with Bank Secrecy Act violations by the U.S. Treasury’s Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN) in October, and agreed to pay about $29 million in a settlement.
It was only last month that Bittrex Global CEO Oliver Linch stated that the exchange expected to fight the claims in court. However, a bankruptcy procedure may make this more difficult.
The SEC’s enforcement proceedings, as well as Bittrex’s recent bankruptcy filing, come after the company stated in March that it will cease operations in the United States by 30 April, citing persistent regulatory uncertainties in the country.
In February, the exchange laid off 83 staff members, citing the crypto market downturn triggered by the collapses and bankruptcy of other crypto enterprises.
Bittrex is the latest in a string of other cryptocurrency exchanges and lending platforms that have recently filed for Chapter 11 bankruptcy protection, including FTX, BlockFi, Celsius, and Voyager Digital.