Bittrex Files For Bankruptcy With Up To $1 Billion In Liabilities
- The Seattle-based exchange’s bankruptcy comes less than a month after it was sued by the SEC.
- Bittrex Global will continue operations and cater to customers outside the United States.
Seattle-based Bittrex Inc recently filed for Chapter 11 bankruptcy in Delaware, U.S. The bankruptcy filing of Bittrex’s American entity will not affect the operations of Bittrex Global, which will continue to cater to the crypto exchange’s customers outside the United States.
According to a press release from Bittrex Inc, all client assets are safe and secure on the platform and will be made available to customers after the Bankruptcy Court approves the method of distribution of funds. The bankrupt exchange plans on asking the court to activate accounts of customers with assets on the exchange in order to process their withdrawals.
“Yes, we still have 100% of all customer funds. Yes, there will be a claims process through the bankruptcy courts. This was the cleanest way to bury the baby,” said Richie Lai, Co-founder and CEO of Bittrex.
Bittrex’s bankruptcy filing comes less than a month after it was sued by the U.S. Securities and Exchange Commission (SEC) for allegedly violating federal securities laws by operating an unregistered national securities exchange, broker, and clearing agency. The SEC’s charges were filed despite the exchange winding down its operations in the United States.
As per the bankruptcy petition filed in the U.S Bankruptcy Court for the District of Delaware, Bittrex declared assets and liabilities between $500 million and $1 billion each. Interestingly, the bankrupt crypto exchange owes nearly $25 million to the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC).
OFAC is ironically listed as Bittrex’s top non-insider creditor and is owed $24.28 million by the crypto exchange. The amount stems from a settlement reached in October last year over alleged violations of multiple sanctions programs and non-compliance with anti-money laundering (AML) requirements by the crypto exchange. While Bittrex Inc. and affiliated entities, including Desolation Holdings LLC, and Bittrex Malta Holdings Ltd have also filed for bankruptcy, the international entity, Bittrex Global, will continue to serve non-U.S. customers. Bittrex Global’s operations will continue as usual.