Crypto exchange Bittrex filed for Chapter 11 bankruptcy protection after announcing plans to leave the United States. The bankruptcy filing also comes nearly a month after the U.S. Securities and Exchange Commission (SEC) sued the company for violating securities laws.
Bittrex enters bankruptcy with over 100,000 creditors
Bittrex Inc. based in Seattle, Washington, decided to enter bankruptcy protection on May 8. The bankruptcy filing, meanwhile, does not affect Bittrex Global, an entity serving non-U.S. customers, according to a statement.
The announcement also mentioned that customer funds still on the platform after April 30 remained safe, adding that the bankruptcy court will decide how such funds will be disbursed to customers.
“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.”
Bittrex bankruptcy announcement
A court filing further revealed that the U.S. company’s estimated number of creditors is over 100,000, with assets ranging between $500,000 and $1 billion, and liabilities also between $500,000 and $1 billion.
The latest development comes over a month after the company announced plans to leave the U.S. by the end of April 2023, due to the country’s unfavorable regulatory environment.
Shortly after, the SEC went after Bittrex and its former CEO William Shihara, alleging that they ran an unregistered securities exchange, broker, and clearing agency. According to the SEC’s complaint, six tokens, including ALGO, OMG, and DASH are listed on Bittrex, and are securities.
However, Bittrex has condemned the SEC’s actions, vowing to defend the company from the regulator’s allegations. Bittrex Global CEO Oliver Linch, also stated that there was no communication between the firm and the SEC before the latter slapped Bittrex with a lawsuit.