Crypto exchange Bittrex files for bankruptcy 3 weeks after US SEC accused it of illegally selling securities
- Bittrex filed for bankruptcy protection in the US, where it ceased operations on April 30, saying it would not impact global operations
- The SEC sued Bittrex in April over allegations that the former CEO encouraged crypto issuers to delete public statements to skirt securities law
Cryptocurrency exchange Bittrex Inc filed for bankruptcy protection on Monday, three weeks after the US Securities and Exchange Commission (SEC) accused it of operating an unregistered securities exchange.
Seattle-based Bittrex ceased operations in the United States on April 30, and it said the bankruptcy filing would not impact Bittrex Global, which serves customers outside the United States. The company’s non-US operations are based in Liechtenstein.
Bittrex’s assets and liabilities were both between US$500 million and US$1 billion, according to a bankruptcy petition filed in Wilmington, Delaware court.
Bittrex said that it was still holding crypto assets of US customers who did not withdraw funds before April 30.
Those assets are “safe and secure” and Bittrex said it intended to ask the bankruptcy court for a limited reopening of customer accounts so that the crypto could be distributed back to customers.
Several companies in the crypto industry have tumbled into bankruptcy over the past year, felled by a drop in asset prices, renewed regulatory scrutiny, and in the case of the once-prominent exchange FTX, criminal charges.
The SEC sued Bittrex on April 17, alleging that former CEO William Shihara encouraged crypto asset issuers seeking to make their tokens available on the company’s platform to delete public statements that could lead regulators to investigate those token offerings as securities.
