The District of Delaware has received an application from Bittrex, a cryptocurrency trading platform, seeking Chapter 11 bankruptcy protection.
Bittrex said that it was embroiled in bankruptcy proceedings, that it has more than 100,000 creditors, around $500 million and $1 billion in assets, as well as between $500 million and $1 billion in liabilities in a petition submitted on May 8 to the United States Bankruptcy Court for the District of Delaware.
Bittrex, Inc., a company established in Seattle, and two associate companies, Desolation Holdings LLC and Bittrex, Inc., both of which are located in Malta, are all included in the bankruptcy. The international exchange with a Liechtenstein basis, Bittrex Global GmbH, was left out of the filing.
After the business and its co-founder and former CEO, William Shihara was accused of securities violations by the U.S. Securities and Exchange Commission (SEC) in April, the declaration was made.
Bittrex Global and Bittrex, Inc. allegedly ran an unregistered securities exchange, according to the SEC. The Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN) of the United States Treasury Department filed charges against the exchange in October for alleged violations of the Bank Secrecy Act, and the exchange accepted a settlement of around $29 million.
By booking a $24.2 million claim for the Office, Bittrex’s bankruptcy petition lists OFAC as the highest creditor. With a $14.5 million claim, a cryptocurrency wallet is its second-biggest creditor.
The SEC appears to have an unknown number of claims, while FinCEN is also included as one of the top 50 creditors with a claim of $3.5 million.
Because of “continued regulatory uncertainty” in the US, Bittrex announced in March that it would close its U.S. operations by April 30. This statement follows the SEC’s latest insolvency filing and enforcement actions.
The Bittrex corporation in the United States has had a difficult year in 2023. In February, the exchange laid off 83 employees and blamed the decline in the crypto market on the failures and bankruptcies of other cryptocurrency businesses.
A number of other cryptocurrency exchanges and lending platforms, including FTX, BlockFi, Celsius, and Voyager Digital, have all recently filed for Chapter 11 protection. Bittrex is the most recent of them.