- Crypto exchange Bittrex has filed for Chapter 11 bankruptcy in the state of Delaware.
- The U.S. Treasury Department’s OFAC is listed as the bankrupt exchange’s largest creditor.
- The bankruptcy filing comes less than a month after the crypto exchange was sued by the U.S. SEC.
Bittrex Inc. has filed for Chapter 11 bankruptcy in the state of Delaware. The Seattle-based crypto exchange’s bankruptcy filing comes less than a month after it was sued by the U.S. Securities and Exchange Commission (SEC). The exchange announced last month that it was winding down operations in the United States in light of the deteriorating regulatory landscape.
Bittrex Owes $25 Million To Treasury Department’s OFAC
According to a report by Bloomberg, Bittrex’s Chapter 11 filing listed assets and liabilities reaching up to $1 billion each. Court papers viewed by Bloomberg revealed that the crypto exchange’s affiliated entities including Desolation Holdings LLC, Bittrex Malta Holdings Ltd., and Bittrex Malta Ltd also filed for bankruptcy. The exchange has clarified that the operations of Bittrex Global will not be impacted by its American entity’s bankruptcy. As for customer assets, the exchange assured its users that their funds are safe and secure on the platform.
This announcement does not impact Bittrex Global, which will continue operations as normal for its customers outside the U.S.”
Ironically, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) is listed as the bankrupt exchange’s largest non-insider creditor. Bittrex owed a whopping $25 million to OFAC as part of a settlement both parties reached in October last year. OFAC imposed the multi-million fine on the crypto exchange over alleged violations of multiple sanctions programs as well as the Bank Secrecy Act’s (BSA’s) anti-money laundering (AML) and suspicious activity report (SAR) reporting requirements. At the time, the enforcement action on the exchange was OFAC’s largest ever.
Bittrex’s bankruptcy filing comes less than a month after it was sued by the U.S. Securities and Exchange Commission over alleged violations of federal laws. The securities regulator charged the exchange and its former CEO Bill Shihara, with operating an unregistered national securities exchange, broker, and clearing agency. The regulator also charges its foreign affiliate with failing to register as a national securities exchange in connection with its operation of a single shared order book along with the American entity.
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Today, Bittrex Inc has announced filing for Chapter 11 bankruptcy protection, citing recurring debts and financial losses as the primary causes for their financial troubles.
Founded in 2014, Bittrex Inc has been one of the largest cryptocurrency exchanges across the US. They are based out of Seattle, Washington and are well-known in the industry for their fast trading engine.
However, in recent years they have been struggling with financial issues. They have been forced to lay off a significant number of employees, as well as suspend various services. This has put them in a difficult position, and they have been unable to turn their financial fortunes around.
The filing for Chapter 11 bankruptcy protection comes as a surprise to many, as Bittrex had recently announced significant investments from top investors. Despite these investments, it appears that Bittrex has been unable to pull itself out of its financial struggles. It is unclear how this filing will affect the future of Bittrex, or what the future will hold for the company.
It is also unclear how this news will affect the cryptocurrency market in general. The news of Bittrex filing for bankruptcy protection may create a negative sentiment in the cryptocurrency community. It is possible that investors will be more cautious when trading on the cryptocurrency market in the future.
At this time, it is too early to tell what the future will hold for Bittrex and the cryptocurrency industry as a whole. All that can be said is that the news of Bittrex filing for bankruptcy protection is a major blow to the industry and may have long-standing ramifications. We can only hope that Bittrex is able to find a way to come out of this financial struggle, and that the cryptocurrency industry as a whole is not too affected by this news.
