Bittrex US, one of the largest cryptocurrency exchanges in the United States, filed for bankruptcy protection on Monday, May 8th, 2023. This comes three weeks after the U.S. Securities and Exchange Commission (SEC) accused the company of operating an unregistered securities exchange.
As previously announced, and as re-confirmed in the Bittrex US statement on Monday, this process does not affect Bittrex Global, and our customers can rest assured that their funds are safe and our services will continue as usual.
— Bittrex Global (@BittrexGlobal) May 8, 2023
The SEC sued Bittrex in federal court last month, alleging it broke the regulator’s rules from 2017 through 2022 while bringing in at least $1.3 billion in revenue. The regulator also brought charges against former Bittrex CEO Bill Shihara and Bittrex Global.
Meanwhile, Bittrex has denied the allegations and stated that it has always been committed to complying with all applicable laws and regulations, saying the crypto assets on its platform are not securities.
Bittrex ceases operations in the US
The Seattle-based Bittrex stopped operating in the United States on April 30 and stated that Bittrex Global, which serves clients outside of the United States, would not be affected by the bankruptcy filing.
However, a bankruptcy petition submitted in Wilmington, Delaware, stated that Bittrex’s assets and liabilities were both between $500 million and $1 billion, believing it has more than 100,000 creditors. The troubled company claimed that it was still holding the cryptocurrency assets of American clients who had not requested withdrawals by April 30.
Bittrex bankruptcy filings list more than $500 million in both assets and liabilities, and more than 100,000 creditors pic.twitter.com/eBn2Q5yiem
— Randall G. Reese (@Chapter11Cases) May 8, 2023
These assets are “safe and secure,” according to Bittrex, which also stated that it planned to ask the bankruptcy court for a limited reopening of customer accounts so that the assets could be returned to customers.
By filing for bankruptcy protection, Bittrex US has left investors in a precarious position, and the market is sure to feel the impact of its closure. While it may be true that Bittrex was operating an unregistered securities exchange, the SEC’s heavy-handed approach and lack of collaboration with the company are a clear indication of its disregard for the growth and development of the crypto industry.
As the company has been one of the most popular cryptocurrency exchanges, its bankruptcy could lead to a decrease in the value of cryptocurrencies in the coming days as investors lose confidence in the market. This ultimately depends on how the proceedings move forward.
However, this already appears to have had a slight impact on the global crypto market, as it currently stands at about $1.14 trillion after decreasing by 1.79% over the last 24 hours. Bitcoin (BTC) is also struggling below $28,000, trading at $27,606.53 at press time on CoinMarketCap. It has crashed by 2.14% over the last day.
