On Monday, cryptocurrency exchange Bittrex declared bankruptcy in the US state of Delaware. The exchange contends that it has more than 100,000 creditors, with liabilities and assets valued between $500 million and $1 billion. Randall Reese of Chapter 11 Dockets, a bankruptcy tracker, pointed out a court document.
This filing comes months after announcing the plan of leaving the United States as their headquarters. The bankruptcy covers its Seattle-based entity Bittrex, Inc, two Bittrex entities in Malta and an affiliated entity Desolation Holdings LLC. Bittrex Global GmbH, the Liechtenstein-based global entity for exchange, was not included in the filing.
The exchange was also charged with Bank Secrecy Act breaches by the US 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. The Office of Foreign Assets Control is Bittrex’s top creditor. It is also one of the largest crypto wallets with the exchange posting a $24.2 million claim for the Office.
Bitterex was sued by the U.S. regulatory body, the Securities and Exchange Commission (SEC) in April 2023. The regulators claimed that Bittrex violated federal securities laws by operating a national securities exchange, broker, and clearing agency at the same time. Bill Shihara, the former CEO, and Bittrex Global GmbH were additionally charged.
The SEC has been raining down hard on the crypto industry. Ripple recently claimed that they shall be flushing almost $200 million on defending the case against the SEC. Multiple other companies like Coinbase are also planning on leaving the country. There have been strong voices being raised against the regulatory body. Lawmakers, investors and other business heads have been calling out the regulatory body for its actions.
In the court documents, Evan Hengel, Bittrex’s Co-Chief Restructuring Officer, stated that clients will get a “100 per cent like-kind cryptocurrency distribution” under the company’s liquidation plan, allowing users to access the Bittrex site and withdraw their crypto.
The tweet received mixed responses from the crypto community. People are slowly losing hope in the industry amidst all the filed bankruptcy and liquidations. A user tweeted, “Crypto is the bankruptcy gift that keeps on giving.” Bittrex is the latest crypto entity to file for bankruptcy, joining fellow exchange FTX and a host of lenders like Celsius, Voyager and BlockFi.
