Bittrex Inc., the U.S.-based cryptocurrency exchange, has filed for Chapter 11 bankruptcy protection in Delaware after being sued by the U.S. Securities and Exchange Commission for failing to register with the regulator. The exchange reportedly has over 100,000 creditors and liabilities ranging from $500 million to $1 billion.
Bittrex Bankruptcy Filing Reveals Over 100,000 Creditors and $1 Billion in Liabilities
Bittrex Inc. filed for Chapter 11 bankruptcy in Delaware on Monday, while its parent company Bittrex Global will continue to operate outside the United States. This development comes after the exchange announced its decision to sunset U.S. operations in early April. By mid-month, the U.S. Securities and Exchange Commission (SEC) sent the company a Wells notice.
On April 17, 2023, the SEC took action against the exchange by charging it for operating an unregistered exchange, clearing agency, and broker. The lawsuit also classified OMG, ALGO, and DASH as “unregistered securities.” Recently, Randall Reese from Chapter 11 Dockets revealed that the crypto platform has 100,000 creditors. To keep them informed, the company has enlisted the help of Omni Agent Solutions to provide regular email and website updates.
The Bittrex Chapter 11 filing reveals assets and liabilities ranging from $500 million to $1 billion. Additionally, Bittrex Global’s two other subsidiaries, Bittrex Malta Holdings Ltd. and Bittrex Malta Ltd., have also filed for bankruptcy protection. U.S. customers who used the crypto exchange were instructed to withdraw their funds by the end of April. Currently, it remains unclear who the company’s largest creditors are and how long the case will last. In response to the situation, Bittrex Inc., based in Seattle, released a statement at 6:30 p.m. (ET).
“Having previously announced that Bittrex, Inc. would be ceasing all operations in the U.S. effective April 30th, we have now made the decision to file Chapter 11 bankruptcy in federal court in Delaware,” Bittrex disclosed. “This announcement does not impact Bittrex Global, which will continue operations as normal for its customers outside the U.S. For those customers who did not withdraw their funds from the platform prior to the end of April, your funds remain safe and secure, and our main priority is to ensure that our customers are made whole.”
What do you think the future holds for Bittrex Inc. in light of this bankruptcy filing and SEC lawsuit?