Major crypto exchange Bittrex has on Oct. 30 been given the go-ahead by the US bankruptcy court to shutter operations in the United States and also liquidate its assets to repay creditors.
While the company is closing down its US business, the international arm based in Lichtenstein continues to serve customers in other jurisdictions.
Judge Brendan Shannon of the US Bankruptcy Court for the District of Delaware approved Bittrex’s revised Chapter 11 bankruptcy plan to wind down its US operations, bringing an end to the firm’s near decade-long business in the country.
The latest development comes months after the crypto exchange announced that it was withdrawing its services from the United States. According to Bittrex, the company made the decision due to the country’s unclear crypto regulations that have made operations no longer feasible.
However, weeks after announcing plans to leave the US, the Securities and Exchange Commission (SEC) served the cryptocurrency exchange a Wells notice, later followed by a lawsuit, alleging that the company and its co-founder and former CEO William Shihara violated securities laws. In addition, the regulator stated that six tokens listed on the Seattle-based platform were securities.
Following the SEC’s allegations, Bittrex filed for Chapter 11 bankruptcy, but not before asking customers to withdraw their funds. As stated in the filing at the time, assets and liabilities were each worth between $500 million to $1 billion, with over 10,000 creditors. Two other entities, Bittrex Malta and Bittrex Malta Holdings also filed for US bankruptcy protection.
While Bittrex initially filed a lawsuit challenging the SEC’s charges and seeking to dismiss them, the firm, in August, reached a settlement with the SEC to pay $24 million in disgorgement, prejudgment interest, and civil penalties. The company did not refute or admit the allegations.
However, the SEC’s action against Bittrex drew criticisms from industry stakeholders, with Paradigm stating in an Amicus brief filing that the American watchdog’s authority did not extend to regulating secondary markets for cryptocurrencies.
With Bittrex leaving the United States, the platform’s international affiliate, Bittrex Global continues to offer its services to clients in other regions.
