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Bittrex U.S. filed for Chapter 11 bankruptcy in a federal court in Delaware, according to a press release. The filing does not affect Bittrex Global.
Cryptocurrency exchange Bittrex U.S. has filed for Chapter 11 bankruptcy, according to a press release and various reports. Only the United States arm of the exchange has filed for bankruptcy following an earlier announcement that the exchange would cease operations on April 30.
Bittrex U.S. filed for bankruptcy in a federal court in Delaware. The filing will not affect the operations of Bittrex Global. Regarding the safety and distribution of customers’ funds, the press release reads,
“For those customers who did not withdraw their funds from the platform prior to the end of April, your funds remain safe and secure, and our main priority is to ensure that our customers are made whole. While the Bankruptcy Court will ultimately decide the method by which those funds can be claimed by and distributed to our customers, we intend to ask the court to activate those accounts as soon as possible so that customers meeting the necessary regulatory requirements…”
The bankruptcy filing makes Bittrex the next exchange in the U.S. to go insolvent, joining a steadily growing list. The most notable of these was FTX, which made major headlines when it collapsed. Many of these exchanges have also been experiencing scrutiny from the United States Securities and Exchange Commission (SEC) — and Bittrex is no different.
Bittrex Was Facing Legal Battle Against SEC
Bittrex U.S. was preparing for a legal battle with the SEC after having received a Wells notice from the agency. The notice was sent because the SEC felt the exchange had engaged in business activities as an exchange, broker-dealer, and clearinghouse without registering.
Bittrex has gone so far as to say that it was ready to sue if the SEC takes enforcement action. The SEC listed tokens such as OMG, DASH, and ALGO in its complaint, stating that these were securities.
Registered in Liechtenstein, the exchange was first launched in 2014. A notable entity in the crypto space, Bittrex has seen trading volumes in the hundreds of millions in the past.
Exchanges Deliberate Moving Headquarters
Crypto exchanges have generally been having a rough time in recent months. P2P exchanges have also suffered, with the prime example being Paxful. The exchange came back online a few days ago after being offline for a month.
Companies and officials have been deliberating whether they should move headquarters, with Coinbase CEO Brian Armstrong saying that the UAE could be a good choice. Many crypto companies have gone to the Middle East because of more accommodating laws.