After three weeks, the U.S. Bittrex Inc. was accused by the Securities and Exchange Commission (SEC) with operating an unregistered securities exchange; the cryptocurrency exchange sought bankruptcy protection on Monday.
On April 30, Seattle-based Bittrex announced the end of its US operations and stated that Bittrex Global, which caters to consumers outside of the US, will not be affected by the bankruptcy case. Liechtenstein serves as the base of the company’s international operations.
According to a bankruptcy petition submitted in a Wilmington, Delaware court, Bittrex’s assets and liabilities were both in the range of $500 million and $1 billion.
According to Bittrex, U.S. users who did not withdraw money before April 30 still have crypto assets in their possession.
These assets are “safe and secure,” according to Bittrex, which also stated that it planned to seek the bankruptcy court for a limited reopening of user accounts so that the cryptocurrency may be returned to customers.
Over the past year, a number of businesses in the cryptocurrency sector have filed for bankruptcy. These failures were caused by a decline in asset prices, increased regulatory attention, and, in the case of the once-famous exchange FTX, criminal charges.
On April 17, the SEC filed a lawsuit against Bittrex, saying that former CEO William Shihara had urged cryptocurrency asset issuers looking to list their tokens on the company’s platform to take down any public statements that would prompt regulators to look into the token sales as securities.
The cryptocurrency assets on Bittrex’s platform were not securities or investment contracts, according to Bittrex, which has refuted the SEC’s accusations.
While the SEC’s action is still remaining, Bittrex has previously agreed to pay the U.S. Treasury Department $29 million in fines for “apparent violations” of the country-specific sanctions and the anti-money laundering law.
The Office of Foreign Asset Control of the Treasury Department was reported by Bittrex as having a debt of more over $24 million, making it the company’s largest unsecured creditor.
The majority of Bittrex’s other biggest creditors were cryptocurrency exchange users. Without mentioning them by name, Bittrex highlighted 16 users who have at least $1 million in their accounts. According to the petition, the largest remaining Bittrex client account has assets at $14.6 million.