Bittrex has gone bust.
In a Monday Chapter 11 bankruptcy filing, the American cryptocurrency exchange said it had more than 100,000 creditors with estimated liabilities and assets both within the $500 million to $1 billion range.
The filing comes just weeks after the U.S. Securities and Exchange Commission filed charges against Bittrex, alleging it had failed to comply with securities law by not registering with the financial watchdog.
The SEC’s criminal complaint alleged that the exchange failed to register as a broker-dealer, exchange, and clearing agency—and that it took in at least $1.3 billion in illicit revenue between 2017 and 2022.
In March, Bittrex said it was winding down U.S. operations, with its CEO Richie Lai citing the “current U.S. regulatory and economic environment” as reasons for the decision. The exchange at the time assured U.S. customers that their funds would be safe.
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
Bittrex is a small Seattle-based company, founded in 2013. With a current 24-hour trading volume of little over $5 million, it is the 82nd largest digital asset exchange, according to CoinGecko.
Its bankruptcy comes at a time when the crypto industry is taking a beating from regulators: the SEC has hit a number of American crypto companies with fines as it goes after major crypto brands that it claims are selling unregistered securities.
The regulatory body often won’t define a single digital asset as a security but points to the Howey test. SEC Chairman Gary Gensler claims that most digital assets are securities—but not Bitcoin, the largest by market cap.
Regulators have fast gone after crypto companies following the collapse of mega digital asset exchange FTX in November.
Just last year, Bittrex agreed to pay $29 million to settle enforcement cases with U.S. authorities for “apparent violations” of sanctions against countries including Iran, Cuba and Syria.
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Source: https://decrypt.co/139368/american-crypto-exchange-bittrex-files-for-chapter-11-bankruptcy
