Bittrex, a cryptocurrency exchange, has recently filed for bankruptcy in the state of Delaware, USA. This comes several months after the company announced its plans to wind down its operations in the country and just weeks after being sued by the Securities and Exchange Commission (SEC).
According to court filings shared by Randall Reese of Chapter 11 Dockets, a bankruptcy tracker, Bittrex estimates that it has over 100,000 creditors. The exchange’s liabilities and assets are both believed to be in the range of $500 million to $1 billion.
Bittrex’s U.S. branch has faced significant challenges throughout 2023. In February, the company laid off 80 employees, and in March, it declared its intention to cease all operations by the end of April. It is worth noting that these changes do not impact Bittrex Global, the non-U.S. branch of the exchange.
Despite Bittrex’s plans to exit the U.S., the SEC filed a lawsuit against the company in mid-April, alleging that it had operated as a national securities exchange, broker, and clearing agency. The SEC also sued former Bittrex CEO Bill Shihara and Bittrex Global. While Bittrex Global CEO Oliver Linch previously stated the exchange’s intent to fight these charges in court, the bankruptcy proceeding may complicate this process.
Bittrex joins the growing list of cryptocurrency entities that have filed for bankruptcy, including fellow exchange FTX and several lenders such as Celsius, Voyager, and BlockFi.
In the Delaware Court filings, Evan Hengel, the Co-Chief Restructuring Officer of Bittrex, stated that customers would receive a “100 percent like-kind cryptocurrency distribution” under the company’s liquidation plan. This would allow customers to access the Bittrex platform and withdraw their cryptocurrency holdings.
Hengel explained that Bittrex faced an unsustainable regulatory and economic environment due to the lack of clarity in U.S. regulations. These uncertainties resulted in significant negative economic consequences for the digital asset industry, along with overlapping regulatory burdens and soaring regulatory costs.
Richie Lai, the co-founder and Chief Executive Officer of Bittrex, tweeted that the bankruptcy filing provided a “clean” resolution to their challenges, but reassured customers that all of their funds are secure.
