US arm of crypto exchange Bittrex files for bankruptcy

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The US arm of cryptocurrency exchange Bittrex filed for bankruptcy in Delaware on Monday, six weeks after announcing it would cease operations in the US due to regulatory uncertainty and three weeks after the Securities and Exchange Commission accused it of operating an unregistered stock exchange.

Bittrex, headquartered in Seattle, announced on March 31 that it would cease operations in the United States on April 30. According to its bankruptcy filing, Bittrex Global, which is headquartered in Liechtenstein and serves non-US customers, is unaffected by the bankruptcy.

Bittrex has more than 100,000 creditors and liabilities and assets estimated between $500 million and $1 billion, according to court documents.

For clients who did not withdraw their crypto assets by April 30, Bittrex is still keeping them safe and intends to ask the bankruptcy court to be able to reopen these accounts so that clients can recover their funds.

Several crypto firms have filed for bankruptcy over the past year, including Celsius, Voyager Digital, FTX, and BlockFi. Before filing for bankruptcy, Bittrex faced other challenges, including paying millions in penalties in October and laying off 80 people in February.

In court filings, Bittrex co-head of restructuring Evan Hengel said customers would get “100% like-kind distribution of cryptocurrency” as part of its liquidation plan, and that the customers could access the Bittrex platform and withdraw their digital assets.

The lack of regulatory clarity in the United States has created a substantial negative economic impact on the digital asset industry and has resulted in overlapping regulatory burdens and skyrocketing regulatory costs, both at the state and federal level, has said Hengels, leaving Bittrex to face an unsustainable regulatory and economic environment. which forced them to initiate a process of restructuring and an orderly liquidation of their activities in the United States.

Bittrex CEO and co-founder Richie Lai tweeted that filing Chapter 11 was the cleanest way to bury the baby.

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