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On October 30, major cryptocurrency exchange Bittrex received approval from the US bankruptcy court to cease operations in the United States and proceed with liquidating its assets to settle debts with creditors.
While the company is winding down its US operations, its international division located in Lichtenstein remains operational for customers in other regions.
Bittrex Stops Operations in the United States
Judge Brendan Shannon of the US Bankruptcy Court for the District of Delaware sanctioned Bittrex’s amended Chapter 11 bankruptcy plan to terminate its US business, marking the conclusion of the firm’s nearly ten-year presence in the country.
This recent development follows months after the crypto exchange declared its intention to withdraw services from the United States. Bittrex cited the nation’s ambiguous cryptocurrency regulations as the reason for making its operations unsustainable.
However, shortly after announcing its exit from the US, the Securities and Exchange Commission (SEC) issued a Wells notice to the cryptocurrency exchange, which was subsequently followed by a lawsuit, claiming that the company and its co-founder and former CEO William Shihara breached securities laws. Additionally, the regulator asserted that six tokens listed on the Seattle-based platform qualified as securities.
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In response to the SEC’s claims, Bittrex filed for Chapter 11 bankruptcy, but not before urging customers to withdraw their funds. According to the filing at that time, both assets and liabilities were estimated to be between $500 million and $1 billion, with over 10,000 creditors involved. Two other entities, Bittrex Malta and Bittrex Malta Holdings, also sought US bankruptcy protection.
International Affiliate Unaffected
Although Bittrex initially filed a lawsuit contesting the SEC’s allegations and sought to have them dismissed, the firm reached a settlement with the SEC in August, agreeing to pay $24 million in disgorgement, prejudgment interest, and civil penalties. The company neither admitted nor denied the allegations.
Nonetheless, the SEC’s actions against Bittrex faced criticism from industry participants, with Paradigm asserting in an Amicus brief that the American regulator’s authority did not encompass the regulation of secondary markets for cryptocurrencies.
As Bittrex exits the United States, its international affiliate, Bittrex Global, continues to provide services to clients in other areas.
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