Yet another crypto-related firm is forced to close its doors.
Bittrex, a Seattle-based cryptocurrency exchange established in 2014, files for Chapter 11 bankruptcy following a challenging year marked by regulatory issues and market struggles.
The May 8th filing in the United States Bankruptcy Court for the District of Delaware revealed that Bittrex has over 100,000 creditors and estimated assets and liabilities ranging from $500 million to $1 billion.
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The bankruptcy encompasses Bittrex, Inc., as well as two Maltese entities and the affiliated Desolation Holdings LLC. It is worth noting that the Liechtenstein-based global entity Bittrex Global GmbH was not included in the bankruptcy proceedings.
This development comes on the heels of the US Securities and Exchange Commission (SEC) charging Bittrex and its former CEO, William Shihara, with securities violations in April.
The SEC argued that Bittrex, Inc. and Bittrex Global operated an unregistered securities exchange. In October, the US Treasury's Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN) charged the crypto exchange with Bank Secrecy Act violation. The company later settled with the entities and agreed to pay $29 million.
OFAC is listed as the largest creditor in Bittrex's bankruptcy filing, with a $24.2 million claim for the institution. The second largest creditor is a crypto wallet with $14.5 million shares. FinCEN and the SEC are also listed among the top 50 creditors, with claims of $3.5 million and an undetermined amount, respectively.
Bittrex announced in March that it would wind down its US operations by the end of April, citing "continued regulatory uncertainty" in the country. When commenting on the matter, Bittrex Global claimed that Chapter 11 filing is "the latest step in <Bittrex> process of ceasing operations in the US."
Bittrex's bankruptcy filing is the latest in a series of Chapter 11 protection filings by other crypto-related firms, including FTX, BlockFi, Celsius, and Voyager Digital.
The outcome of the bankruptcy proceedings remains to be seen, but it's clear that the crypto industry is facing increased scrutiny and challenges.
