Bittrex, a US crypto exchange, seeks bankruptcy following an SEC complaint.

Bittrex Files for Bankruptcy Protection Amid SEC Accusations

What Happened?

Cryptocurrency exchange Bittrex has filed for bankruptcy protection, just three weeks after the Securities and Exchange Commission (SEC) accused it of operating an unregistered securities exchange for years. The company made the filing in a Wilmington, Delaware court on May 8, after announcing in March that it would wind down operations in the United States by the end of April. Court filings also show that related entities Desolation Holdings LLC, Bittrex Malta Holdings Ltd., and Bittrex Malta Ltd. had also filed for bankruptcy.

What Does This Mean?

Bittrex is the latest crypto exchange to file for bankruptcy, joining FTX and other rivals like Celsius, Voyager, and BlockFi. Several companies in the crypto industry have filed for bankruptcy over the past year, led by falling asset prices, increased regulatory crackdowns, and criminal charges in the case of the failed crypto exchange giant FTX. Despite the impending shutdown of its American operations, the SEC decided to sue Bittrex in federal court in mid-April for allegedly violating regulations from 2017 through 2022, which was immediately denied at the time.

What’s Next?

Bittrex has already ceased its U.S. operations and said that the bankruptcy filing would not impact Bittrex Global, which still serves customers outside the United States from its base in Liechtenstein. The company declared that it was still holding crypto assets of American customers who failed to withdraw their funds before the end of April deadline. The company “faced an untenable regulatory and economic environment” given “the lack of regulatory clarity in the U.S. [which] created a substantial negative economic impact on the digital asset industry and resulted in overlapping regulatory burdens and soaring regulatory costs,” according to Evan Hengel, Bitrrex’s co-chief restructuring officer.

Key Takeaways

• Bittrex has filed for bankruptcy protection after the SEC accused it of operating an unregistered securities exchange for years.
• The company has already ceased its U.S. operations and said that the bankruptcy filing would not impact Bittrex Global.
• The company is still holding crypto assets of American customers who failed to withdraw their funds before the end of April deadline.
• Bittrex has more than 100,000 creditors, with estimated assets and liabilities both worth between $500 million and $1 billion.

Disclaimer: The above text is for informational purposes only and should not be considered as financial advice. Please consult a financial professional before making any investment decisions.