Bittrex files for Chapter 11 bankruptcy just weeks after SEC charges

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Cryptocurrency trading platform Bittrex has filed for Chapter 11 bankruptcy protection in the Delaware district.

In documents filed in the US Bankruptcy Court for the District of Delaware on May 8, Bittrex announced that as part of the bankruptcy proceedings, more than 100,000 creditors, $500 million to $1 billion in assets, and $500 million to We estimate that we have $1 billion in debt.

The bankruptcy covers Seattle-based Bittrex, Inc, two Bittrex entities in Malta, and a related entity, Desolation Holdings LLC. Bittrex Global GmbH, a global entity of exchanges based in Liechtenstein, was not included in the filing.

The declaration follows the US Securities and Exchange Commission (SEC) in April indicting the company and co-founder and former CEO William Shihara for securities violations.

The SEC alleged that Bittrex, Inc and Bittrex Global operate an unregistered stock exchange. The exchange agreed to pay a settlement of about $29 million after he was accused of violating the Bank Secrecy Act by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN) in October. Did.

OFAC is the largest creditor listed in Bittrex’s bankruptcy filing, with the exchange booking $24.2 million in claims to the firm. The next largest creditor is a crypto wallet with a claim of $14.5 million.

FinCEN is also listed as a top 50 creditor with a claim of $3.5 million, while the SEC is listed with an undetermined claim.

The SEC enforcement action and recent bankruptcy filing came when Bittrex announced in March that it would scale back its U.S. operations by April 30, citing “continued regulatory uncertainty” in the country. I got

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2023 has been a tough year for Bittrex’s US entity. The exchange also laid off 83 employees in February, citing a downtown crypto market caused by bankruptcies and bankruptcies of other crypto companies.

Bittrex’s bankruptcy is the latest in a string of other cryptocurrency exchanges or lending platforms that have also recently applied for Chapter 11 protection, including FTX, BlockFi, Celsius and Voyager Digital.

Bittrex Global CEO Oliver Lynch did not immediately respond to Cointelegraph’s request for comment.

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Update (May 8, 10:50 PM UTC): This article has been updated with additional information from the bankruptcy filing and further background information.

Additional reporting by Jesse Coghlan.