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:

Tags

Upcoming Events

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.

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.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Featured.png

Research

Helium stands at a pivotal moment in its evolution as a decentralized wireless network, balancing rapid growth, economic restructuring, and global expansion. With accelerated growth in domestic DAUs and Hotspots supporting its network, Helium is leveraging strategic partnerships and innovative proposals to scale internationally. The recent implementation of HIP 138, “Return to HNT,” has unified its token economy under HNT, simplifying participation and strengthening liquidity, while HIP 139’s phase-out of CBRS refocuses efforts on scalable Wi-Fi offload. Meanwhile, governance shifts under HIP 141 raise questions about centralization as Nova Labs consolidates control over the roadmap.

article-image

In 2011, WikiLeaks faced a financial blockade imposed by the US government. It was Bitcoin’s first major test.

article-image

Kado’s founder Emery Andrew spoke to Blockworks about the acquisition and what’s next for the team

article-image

LayerZero’s Bryan Pellegrino chatted with Blockworks about the firm’s next steps and its 10-year runway

article-image

Colosseum co-founder Matty Taylor is seeing “high-performance [Solana] founders showing a lot of interest in private trading technology”

article-image

Executives weigh the growth potential they see in the public stock and private credit/equities arenas

article-image

Players can stake ME, trade tokens and link wallets to climb the leaderboard