[Feature] Another One Bites the Dust: Bittrex US Joins the Bankruptcy Club

Cryptocurrency exchange Bittrex has filed for Chapter 11 bankruptcy in the United States (US) state of Delaware just yesterday. The company also disclosed in a filling that it had over 100,000 creditors and assets between $500 million and $1 billion, with liabilities within the same range.

The decision to file for bankruptcy came on the heels of the US Securities and Exchange Commission (SEC) charging Bittrex and its co-founder and former CEO William Shihara for securities violations in April.

The SEC alleged that Bittrex, Inc. and Bittrex Global operated an unregistered securities exchange. Additionally, in October, the exchange received charges relating to Bank Secrecy Act violations from the US Treasury’s Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN) and had agreed to pay approximately $29 million in a settlement.

Last month, Bittrex Global CEO Oliver Linch said that they intended to fight the charges in court, but a bankruptcy proceeding may make this more tedious.

Prior to that, Bittrex had tweeted that they have made the decision to wind down their US operations due to continued regulatory uncertainty. The company posted the message on the website as well.

The company went on to reassure its customers that the bankruptcy does not impact its non-US operations and Bittrex Global will continue operating as per normal. As for users who did not withdraw their assets before the shutdown, the company's intention is "to ask the court to activate those accounts as soon as possible so that customers meeting the necessary regulatory requirements will be able to withdraw them.”

Bittrex added that, "While the Bankruptcy Court will ultimately decide the method by which those funds can be claimed by and distributed to our customers, we intend to ask the court to activate those accounts as soon as possible so that customers meeting the necessary regulatory requirements will be able to withdraw them.”

Bittrex is yet another crypto exchange that had bitten the dust and joined the bankruptcy club, along with FTX, BlockFi, Celsius, and Voyager Digital. For reference, FTX filed for bankruptcy last November and they are seeking to claw back about $4 billion, as such, there will be a hearing on 25 May to discuss the motion. As for the rest, BlockFi filed about two weeks odd after FTX, and Celsius and Voyager Digital filed in July.

The bankruptcy proceedings represent a significant blow to the crypto exchange, which had been one of the most popular trading platforms for digital assets. As the company navigates the bankruptcy process, it remains to be seen what the future holds for Bittrex and its users.