Bittrex Inc. filed for Chapter 11 bankruptcy protection for its US-based businesses on May 8. Three weeks ago, the Securities and Exchange Commission (SEC) charged it with running an unregistered securities exchange. According to the document, the exchange’s assets and liabilities were valued between $500 million and $1 billion. It also claimed to have over 100,000 creditors.
According to sources, the business indicated that it was still holding crypto assets of US clients who did not withdraw cash by April 30. The monies are “safe and secure,” it claimed, adding that it intends to petition the court to restore client accounts so that they can withdraw.
The business also indicated that the bankruptcy case had no effect on its Liechtenstein-based offshore operations, Bittrex Global. However, two additional companies, Bittrex Malta Ltd. and Bittrex Malta Holdings Ltd., have also filed for bankruptcy in the United States.
A spokeswoman stated that Bittrex Global will continue to operate normally for its users outside the United States. They further stated that funds not withdrawn from the site prior to the end of April are still safe and secure, and the company’s first aim is to make clients whole.
U.S. Congress has yet to officially classify crypto assets as securities, so this is another case of the SEC taking the law into its own hands with extrajudicial enforcement actions.
Bittrex Closed Down U.S. Operations
The exchange announced the closing of its US exchange in late March, amid federal officials’ growing battle on cryptocurrency. Bittrex was fined $53 million in October for breaking anti-money laundering (AML) legislation.
The exchange, founded in 2014, was formerly one of the major cryptocurrency exchanges in the United States. According to CoinGecko, it presently has a daily volume of roughly $7 million and supports 799 trade pairings.