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Bittrex, a Cryptocurrency Exchange, Declares Bankruptcy in the United States

Bittrex Inc, the renowned cryptocurrency exchange, has recently made the headlines by filing for bankruptcy protection, just three weeks after being accused of running an unregistered securities exchange by the U.S. Securities and Exchange Commission (SEC). 

While the company’s US operations came to a halt on April 30, Bittrex Global, which caters to clients overseas, was not affected and continues to operate from Liechtenstein.

SEC Taking Action

 In a curious turn of events, the SEC charged the exchange with violating federal laws in mid-April 2023, paving the way for the winding down of its domestic operations.

However, Bittrex Global has resolved to maintain its regular operations for customers accessing its services outside of the US. In light of the US regulatory framework, however, Bittrex will take steps to activate the accounts of its US-based customers who have yet to withdraw their assets.

Bittrex is currently seeking court approval to expedite this process, thereby allowing those who meet the necessary regulatory criteria to withdraw their assets without delay. 

Bittrex has become the latest victim, in a growing list of targets for the US SEC’s rigorous regulatory efforts. Following the demise of FTX in November 2022, the SEC has been quiet strict in its oversight of crypto trading platforms, including heavyweights like Coinbase.   

Charges of Bittex

Bittrex, the cryptocurrency exchange company, has been hit with a number of charges, including violations of regulatory rules and bankruptcy filings. 

Bittrex’s Chapter 11 filing reveals an overwhelming amount of assets and liabilities each above $1 billion. In related news, Bittrex Malta Ltd., Desolation Holdings LLC, and Bittrex Malta Holdings Ltd. have also filed for bankruptcy.  The SEC claims that Bittrex has been breaking regulatory rules since 2017, while generating revenue of over $1.3 billion.

The commission states that Bittrex has been operating as a brokerage, exchange, and clearing agency, without proper registration. Despite Bittrex’s promise to take legal action against the SEC, they were unable to succeed in avoiding the charges laid against them.    

Bittrex also disclosed that its largest creditor without collateral is the Office of Foreign Assets Control under the US Treasury. Furthermore, this entity also has a standing debt of $24 million.

This hefty sum arose from a previous settlement where the platform was charged for inadequate measures in preventing customers from Iran and other countries with sanctions from utilizing its services.