Bittrex Files For US Bankruptcy Just Weeks After SEC Lawsuit

The Bittrex bankruptcy has revealed the Treasury’s Office of Foreign Assets Control as the crypto exchange’s largest creditor

article-image

Primakov/Shuttesrtock, modified by Blockworks

share

Bittrex has filed for bankruptcy less than one month after the Securities and Exchange Commission (SEC) charged it with running an unregistered securities exchange.

The Seattle-based firm halted US operations at the end of April. Bittrex said international customers served by its global platform — based in Liechtenstein — would not be impacted by its US bankruptcy.

Bittrex, which was founded in 2014, said it has more than 100,000 US-based creditors. Its estimated liabilities between $500 million and $1 billion, per a May 8 filing to Delaware’s bankruptcy court.

There are still customers in the US who have not yet withdrawn their funds from the exchange, Bittrex said. However, they will have to wait until the bankruptcy process determines the appropriate methods for distributing those funds.

In addition, the filed petition provided a breakdown of Bittrex’s 50 largest unsecured creditors, excluding insiders.

Notably, the US Treasury’s Office of Foreign Asset Control emerged as the largest creditor, with a substantial claim exceeding $24 million. 

Bittrex also disclosed the presence of 17 other customers who maintained a minimum balance of $1 million in their exchange accounts.

The SEC itself is listed as a creditor — although the specific claim amount remains undisclosed — likely due to ongoing legal matters or potential claims that the agency made against Bittrex.

The agency sued Bittrex last month, alleging that six crypto tokens including DASH, ALGO, OMG, TKN, NGC and IHT are securities.

According to the agency, Bittrex and former CEO William Shikara collaborated with token issuers to remove certain statements that could attract regulatory scrutiny and potentially lead to an investigation by the SEC regarding the tokens considered securities.

Bittrex Global’s CEO Oliver Linch told Blockworks last week that conversations between Bittrex’s lawyers and the SEC recently took place.

But Linch said those discussions lacked substance and did not provide the exchange with opportunity to adequately explain the situation or clarify what was happening.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2023

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research Report Cover Vertex.jpg

Research

The proliferation of new perp DEXs has led to fragmented liquidity across various DEXs and chains. Vertex, known for its vertically-integrated DEX that includes spot, perpetual, and integrated money markets, is now tackling cross-chain liquidity fragmentation through horizontal integration with the launch of new Edge instances. Vertex's integrated offerings and cross-margined account structure amplify the benefits of new instances: native cross-chain spot trading, optimized cross-chain basis trading, consistent interest rates, reduced bridging friction, and more.

article-image

Plus, a dive into crypto’s ever-expanding unicorn club

article-image

Also, tokenization continues to grab headlines and one bitcoin miner stock soars Tuesday after inking a big deal

article-image

Fifteen million daily failed transactions disappeared from Solana

article-image

FTX debtors will pay the IRS $200M, with an outstanding lower priority claim of $685M

article-image

I’ve come to the realization that more attention is needed to create and sculpt the digital spaces where we live

article-image

The NYSE went down yesterday after a glitch caused a string of erroneous trades. Does DeFi fix this?