Bitcoin Loan Can Help Fund Bittrex Bankruptcy, Court Rules

Bittrex filed for bankruptcy after the SEC sued the company

article-image

Useacoin/Shutterstock modified by Blockworks

share

Crypto exchange Bittrex is approved to borrow $6.8 million in bitcoin to fund its US Chapter 11 bankruptcy.

In the court hearing, which took place this week in Wilmington, Delaware, Bittrex’s lawyers said the exchange had enough crypto to return customer funds. The loan would instead be used to protect and ensure a smooth bankruptcy process for both customers and the company. 

According to a Reuters report, Judge Brendan Shannon approved the loan, allowing Bittrex to borrow 250 bitcoin (BTC) on an interim basis from Aquila Holdings — its parent company. 

Seattle-headquartered Bittrex is expected to ask for an additional 450 BTC ($12.2 million) in June. The company filed for bankruptcy on May 8.

However, it halted US operations at the end of April, days before the SEC sent both Bittrex US and Bittrex Global a Wells notice and sued Bittrex US for running an unregistered securities exchange. Bittrex Global is incorporated in Liechtenstein.

In the suit, the SEC alleges that six of the tokens listed on Bittrex fall under the definition of securities under current law, including algorand (ALGO) and DASH. Bittrex did not immediately return a request for comment.

Bittrex Global CEO Oliver Linch previously told Blockworks the decision to shutter Bittrex US came because “we only believe in doing the right thing and we, literally, can’t because we don’t know what that means.”

According to Linch, neither Bittrex US nor Bittrex Global were given the opportunity to respond to the SEC’s Wells notice, though lawyers from Bittrex have been in contact with the SEC since.


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.jpg

Research

Bluefin possibly stands at an inflection point. The token is near an all-time low yet the protocol’s spot volume market share and derivatives exchange usage have been increasing month over month since its November launch. Given its current market position and the upcoming upgrades (for both Bluefin and SUI), there may be upside potential before the increased supply growth in December. However, strong opposition from existing competitors (like Cetus and Suilend), as well as new entrants (like Aftermath), pose key challenges to Bluefin’s medium-term success.

article-image

Top Committee Democrat Sen. Elizabeth Warren in her opening statement accused Atkins of “helping billionaire CEOs like Sam Bankman-Fried”

article-image

Introducing garbled circuits for enhanced privacy and regulatory compliance

article-image

Ross Ulbricht was a freedom maximalist building freedom tech, powered by Bitcoin

article-image

Solana validators can reap benefits including payments, votes and community clout

article-image

Sponsored

WalletConnect is cementing itself as the essential connectivity layer, ensuring wallets remain the entry point for billions of users

article-image

According to a legal filing, Galaxy Digital helped boost the price of LUNA while quietly selling its tokens