Crypto Exchange Bittrex Files For Bankruptcy• May 9, 2023 2:06 pm • Comments
Crypto exchange Bittrex was most recently targeted by the SEC where the agency made allegations that the exchange was dealing with securities.
This has been part of a wide spread agenda that the SEC has to crack down on the crypto industry by using a series of enforcement actions.
However, the company has now revealed that it has filed for bankruptcy in the state of Delaware which marks another exchange that has now gone bankrupt.
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The timing is quite interesting given that it has only been a few weeks since they got sued by the SEC.
As a result, it is expected that the company has around $500 million to $1 billion in potential liabilities which will affect many creditors.
The bankruptcy filing comes less than a month after Bittrex was sued by the Securities and Exchange Commission for allegedly operating an… pic.twitter.com/ZvpzLq4p5h
— The Butcher of Wall Street | Marcel Kalinovic (@BossBlunts1) May 8, 2023
Bittrex said that it was still holding crypto assets of U.S. customers who did not withdraw funds before April 30.
Those assets are “safe and secure” and Bittrex said it intended to ask the bankruptcy court for a limited re-opening of customer accounts so that the crypto could be distributed back to customers.
Several companies in the crypto industry have tumbled into bankruptcy over the past year, felled by a drop in asset prices, renewed regulatory scrutiny, and in the case of the once-prominent exchange FTX, criminal charges.
The SEC sued Bittrex on April 17, alleging that former CEO William Shihara encouraged crypto asset issuers seeking to make their tokens available on the company’s platform to delete public statements that could lead regulators to investigate those token offerings as securities.
Bittrex has denied the SEC’s allegations, saying the crypto assets on its platform were not securities or investment contracts.
It is unclear if the actions of the SEC have caused the exchange to go bankrupt or if the exchange already had plans to file bankruptcy regardless.
With that being said, it seems that the assets of US customers are still safe and they are encouraged to withdraw funds so that all assets can be returned back to customers.
Bittrex has also previously denied all allegations by the SEC and claimed that none of the assets they were dealing with are considered securities.
The SEC had also made similar claims for other exchanges as well such as Coinbase and Binance which have been the subject of a lot of regulatory scrutiny recently.
All these events may eventually reduce the number of crypto firms that operate within the US due to regulatory and market uncertainty.
BREAKING: Crypto Platform Bittrex files for Chapter 11 Bankruptcy in Delaware. https://t.co/nGOI6mLvPH
— Cointelegraph (@Cointelegraph) May 8, 2023
Bittrex’s U.S. branch has had a rough 2023 so far, laying off 80 people in February and announcing in March that it would end all operations by the end of April. These changes have not affected Bittrex Global, the non-U.S. crypto exchange.
Despite Bittrex’s impending exit from the U.S., the SEC sued it in mid-April on allegations it operated a national securities exchange, broker and clearing agency.
The SEC also sued former Bittrex CEO Bill Shihara and Bittrex Global. Bittrex Global CEO Oliver Linch said last month that the exchange intended to fight these charges in court, but a bankruptcy proceeding may make this more difficult.
Bittrex is the latest crypto entity to file for bankruptcy, joining fellow exchange FTX and a host of lenders like Celsius, Voyager and BlockFi.
NEWS: Bittrex files for US bankruptcy following SEC lawsuit.https://t.co/hwmiZM6t8o
— Blockworks (@Blockworks_) May 9, 2023
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