Bittrex, a cryptocurrency exchange, has filed for bankruptcy in Delaware, marking its departure from the U.S. This move comes after the company announced its intention to wind down operations in the country and amidst a lawsuit filed by the Securities and Exchange Commission (SEC).
According to court documents shared by bankruptcy tracker Randall Reese, Bittrex estimates having over 100,000 creditors and places its liabilities and assets in the range of $500 million to $1 billion.
Bittrex’s U.S. branch has faced various challenges this year, including laying off 80 employees in February and declaring the cessation of all operations by the end of April, although Bittrex Global, the non-U.S. arm of the exchange, remains unaffected.
Despite the impending exit from the U.S., Bittrex is currently battling a lawsuit filed by the SEC in April. The SEC alleges that Bittrex operated as a national securities exchange, broker, and clearing agency. Former Bittrex CEO Bill Shihara and Bittrex Global are also named in the lawsuit. While Bittrex Global’s CEO, Oliver Linch, expressed the exchange’s intention to fight these charges in court, the bankruptcy proceedings may present additional challenges.
Bittrex joins a growing list of crypto entities that have filed for bankruptcy, including FTX and several lenders like Celsius, Voyager, and BlockFi.
In the bankruptcy filings made at the Delaware Court, Evan Hengel, the Co-Chief Restructuring Officer of Bittrex, stated that customers would receive a 100% distribution of like-kind cryptocurrencies as part of the liquidation plan. This would enable customers to access the Bittrex platform and withdraw their crypto holdings.
Hengel attributed the company’s decision to the challenging regulatory and economic environment in the U.S., citing a lack of regulatory clarity, overlapping regulatory burdens, and increasing regulatory costs that had a significant negative impact on the digital asset industry.
Richie Lai, co-founder and CEO of Bittrex, mentioned on Twitter that the bankruptcy filing was the “cleanest way to bury the baby,” but assured customers that 100% of their funds were still secure.
