Bittrex Files for Chapter 11 Bankruptcy Just Weeks After SEC Accusations

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Cryptocurrency trading platform Bittrex has filed for Chapter 11 bankruptcy protection in the District of Delaware.

In a May 8 filing with the United States Bankruptcy Court for the District of Delaware, Bittrex estimated that it had more than 100,000 creditors, between $500 million and $1 billion in assets, and between $500 million and $1 billion in liabilities in bankruptcy proceedings.

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 exchange entity, was not included in the filing.

The statement follows the U.S. Securities and Exchange Commission (SEC) indicting the company and its co-founder and former CEO William Shihara for securities violations in April.

The SEC claimed that Bittrex, Inc and Bittrex Global operated an unregistered stock exchange. In October, the exchange also received charges of bank secrecy violations from the US Treasury’s Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN) and agreed to pay approximately $29 million dollars as part of a settlement.

OFAC is the largest creditor listed in Bittrex’s bankruptcy filing, with the exchange reserving a $24.2 million claim against the Office. Its second largest creditor is a crypto wallet with a claim of $14.5 million.

FinCEN is also listed as one of the top 50 creditors with a $3.5 million claim, the SEC is listed with an undetermined amount of claims.

OFAC ranks first among Bittrex creditors with claims of $24.2 million. Source: PACER

The SEC enforcement actions and its recent bankruptcy filing come as Bittrex announced in March that it would end its operations in the United States by April 30, citing “continuing regulatory uncertainty” in the country.

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It’s been a rough year for Bittrex’s U.S. entity in 2023. The exchange also cut 83 employees in February, citing the downtown crypto market caused by other companies’ meltdowns and bankruptcies. of cryptography.

Bittrex’s bankruptcy is the latest in a series of other crypto exchange or lending platforms that have also recently filed for Chapter 11 protection, including FTX, BlockFi, Celsius and Voyager Digital.

Cointelegraph reached out to Bittrex Global CEO Oliver Linch for comment, but did not immediately receive a response.

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Update (May 8, 22:50 UTC): This article has been updated with additional information on the bankruptcy filing and other general information.

Additional reporting by Jesse Coghlan.

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