U.S. Crypto Exchange Bittrex Files for Bankruptcy in Delaware – Bittrex filed for bankruptcy on Monday in the U.S. state of Delaware, months after saying it would cease operations in the country and weeks after being sued by the Securities and Exchange Commission (SEC).
According to a court file shared by Randall Reese of Chapter 11 Dockets, a bankruptcy tracker, the exchange estimates it has more than 100,000 creditors, with estimated liabilities and assets ranging from $500 million to $1 billion. Bittrex’s US branch has had a difficult start to 2023, cutting off 80 people in February and announced in March that it would cease all operations by the end of April.
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These modifications have had no effect on Bittrex Global, the non-US cryptocurrency exchange. Despite Bittrex’s approaching exit from the United States, the Securities and Exchange Commission (SEC) sued it in mid-April on charges that it ran a national securities exchange, broker, and clearing agency. The SEC also filed a lawsuit against former Bittrex CEO Bill Shihara and Bittrex Global.
Last month, Bittrex Global CEO Oliver Linch stated that the exchange expected to fight the claims in court, but a bankruptcy procedure may make this more difficult. Bittrex is the latest cryptocurrency company to declare bankruptcy, joining fellow exchange FTX and a number of lenders including Celsius, Voyager, and BlockFi.
In filings made at the Delaware Court, Evan Hengel, the company’s Co-Chief Restructuring Officer of Bittrex, said that customers would get a “100 percent like-kind cryptocurrency distribution” under its liquidation plan, enabling them to access the Bittrex platform and withdraw their crypto.
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The company “faced an untenable regulatory and economic environment” given “the lack of regulatory clarity in the U.S. which created a substantial negative economic impact on the digital asset industry and resulted in overlapping regulatory burdens and soaring regulatory costs,” Hengel said.
Richie Lai, co-founder and Chief Executive Officer of the company, tweeted that the bankruptcy filing was the “cleanest way to bury the baby,” but that Bittrex “still have 100% of all customer funds.”