Crypto exchange Bittrex Inc filed for Chapter 11 bankruptcy protection on Monday. The filing comes after the exchange suspended its US operations.
Seattle-based cryptocurrency exchange Bittrex Inc filed for bankruptcy on May 8, just weeks after the US Securities and Exchange Commission (SEC) accused it of operating as an unregistered securities exchange, broker-deal, and clearinghouse.
According to Reuters, Bittrex Inc, which ceased its operations in the US on April 30 due to regulatory concerns, said its bankruptcy filing would not affect Bittrex Global, which serves customers outside the US.
The bankruptcy petition filed in a Delaware court indicates Bittrex’s assets and liabilities were between $500 million and $1 billion, with over 100,000 creditors.
Reuters further reports that the exchange still holds assets of some of its US customers that did not withdraw funds before the April 30 deadline. Bittrex assured its customers that the funds were “safe and secure.”
Bittrex’s Woes
Bittrex announced on March 31 that it would suspend its operations in the US, claiming that it was not “economically viable” to continue doing business there.
The exchange said its offshore operations, Bittrex Global, which serves traders in Europe, Canada, and South America, would remain unaffected.
Soon after the exchange announced its decision to leave the US, the SEC charged the firm for operating as an unregistered securities exchange, broker-dealer, and clearinghouse.
The agency also charged Bittrex’s former CEO, William Shihara, for his involvement in the company’s alleged violations.
The SEC further alleges that from 2017 to 2022, the exchange earned over $1.3 billion in revenue from transaction fees from investors while offering its services without the necessary registration from the agency.
Bittrex’s counsel, David Maria, said the exchange attempted to comply with the agency’s rules but could not do so unless it essentially ceased all its revenue-producing services in the US. It was, however, unable to do so over the agency’s failure to provide clear guidelines for the crypto industry.
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