US Crypto Exchange Bittrex Receives Bankruptcy Nod to Cease its Operations

1698734649-bittrex-depositphotos-1 — Source: Depositphotos

A Delaware court judge approved the Chapter 11 plan of Seattle-based cryptocurrency exchange Bittrex on Monday to cease its operations.

In April, the US Securities and Exchange Commission (SEC) charged Bittrex, its co-founder and former CEO William Shihara. Bittrex faced allegations of operating an unregistered national securities exchange, broker and clearing agency.

The regulator claimed that Bittrex facilitated the buy/sell of digital assets since at least 2014, earning $1.3 billion in revenue. Following the SEC’s complaint, the platform filed for bankruptcy in a Delaware federal court in early May.

The commission specifically claimed that Bittrex offered OMG, Dash, ALGO, Monolith (TKN), and Naga (NGC) which are considered unregistered securities.

“It’s just not economically viable for us to continue to operate in the current U.S. regulatory and economic environment.”

In August, the company reached a $24 million settlement with the SEC.

Court Nods for Bittrex Chap. 11 Plan

On Monday, U.S. Bankruptcy Judge Brendan Shannon approved the exchange’s bankruptcy plan at a court hearing, enabling Bittrex to wind down its US operations.

Per a Reuters report, the nod would enable Bittrex to have enough money to pay unsecured creditors in full. The company noted that its bankruptcy filing would not affect Bittrex Global, which operates outside the US.

Bittrex had in fact encouraged its customers to withdraw funds before the company filed for bankruptcy. The approach differs from other crypto companies that have filed for bankruptcy in the recent past, which locked customer accounts. Interestingly, the US arm of Bittrex Global, was not insolvent.

In September, a majority of Bittrex customers left money behind by failing to claim their digital assets. Per a hearing update, only 35,972 customers, less than 3% of those identified by the court, made claims.

The exchange also stressed that to withdraw funds, customers had to undergo extensive know your customer (KYC) process.