Bittrex Faces Bankruptcy, Withdrawals Initiated Amid SEC Lawsuit

 

Bittrex Faces Bankruptcy, Withdrawals Initiated Amid SEC Lawsuit
In a significant development, the US division of the cryptocurrency exchange Bittrex, which has since declared bankruptcy, has announced its decision to initiate withdrawals. This decision comes in the wake of a ruling by the Delaware bankruptcy court. Prior to its financial collapse, the exchange had established itself as a prominent player in the crypto industry.

The renowned cryptocurrency exchange, Bittrex, made the decision to file for bankruptcy in May 2023. As part of this process, the exchange concluded its operations within the United States by the end of April 2023. While the bankruptcy proceedings may have implications for its operations in the US, it is yet to be seen how it will impact its activities in other regions.

During the hearing held on June 13, Judge Brendan Shannon granted permission to the cryptocurrency exchange, enabling it to facilitate the withdrawal of digital assets and fiat currency from the debtors' trading platforms. This allowance specifically applies to customers' holdings that are classified as undisputed, noncontingent, and liquidated claims, limited to the extent of such claims.

According to the court filing, Bittrex has disclosed total assets worth $500 million US Dollars, along with liabilities amounting to $1 billion. The decision to pursue bankruptcy could potentially be linked to an SEC lawsuit filed against the Seattle-based exchange. The lawsuit alleges that Bittrex engaged in the sale of unregistered securities, thereby prompting legal action from the regulatory body.

Following the lawsuit, the cryptocurrency exchange has strongly refuted the allegations of selling unregistered securities. In response, Bittrex has emphasized that the assets listed on its platform do not fall under the category of securities or investment contracts. The exchange maintains that the nature of the assets it offers does not meet the criteria for classification as securities, thereby contesting the SEC's claims.

Bittrex had reached an agreement to pay a fine amounting to $29 million to the United States Treasury Department. This settlement came as a result of the exchange's involvement in violations related to sanctions imposed on other countries and non-compliance with Anti-Money Laundering (AML) laws. The fine serves as a resolution to address the regulatory concerns and penalties associated with these violations.

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