In short: Bittrex has filed for Chapter 11 bankruptcy protection for its US-based operations, following allegations by the Securities and Exchange Commission (SEC) of operating an unregistered exchange. The filing disclosed that Bittrex is holding funds belonging to US customers who did not withdraw before April 30, which the company said were “safe and secure”. The filing also revealed that there are over 100,000 creditors, with the amount of both assets and liabilities estimated at between $500m and $1bn. Bittrex Global operates out of Liechtenstein and is unaffected by the Chapter 11 filing.
Our quick analysis:
Bittrex, once one of the largest crypto exchanges in the U.S., has filed for Chapter 11 bankruptcy protection for its U.S.-based operations. This comes after the Securities and Exchange Commission (SEC) accused the firm of operating an unregistered securities exchange. Things don't seem to be looking good for Bittrex, as the company stated that it had assets and liabilities each estimated to be worth between $500 million and $1 billion, with over 100,000 creditors.
The SEC took action against Bittrex on April 17, alleging that the firm and its executives were promoting and selling unregistered securities. Bittrex has been denying these allegations, claiming that the assets it offered were not securities. However, the SEC seemed to take the law into its own hands with extrajudicial enforcement actions, as U.S. Congress has yet to officially classify crypto assets as securities.
To make matters worse, Bittrex had already announced the closure of its U.S. exchange in late March, due to the intensifying war on crypto from federal regulators. Adding insult to injury, the company was also fined $53 million in October for violating anti-money laundering (AML) laws.
Despite all the chaos, Bittrex Global, the company's Liechtenstein-based offshore operations, stated that it was not affected by the bankruptcy filing. And for those customers who did not withdraw their funds from the platform prior to the end of April, the funds remain safe and secure. Bittrex intends to ask the court for a reopening of customer accounts to allow them to withdraw.
The crypto markets have also taken a hit, dropping 1.8% today and decreasing total capitalization to $1.18 trillion. It seems that Bittrex's bankruptcy protection is another warning sign for those in the crypto space, and regulators are keeping a keen eye on any exchanges that may be operating outside of the law.
Image provided by Unsplash
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
Our quick analysis:
Bittrex, once one of the largest crypto exchanges in the U.S., has filed for Chapter 11 bankruptcy protection for its U.S.-based operations. This comes after the Securities and Exchange Commission (SEC) accused the firm of operating an unregistered securities exchange. Things don't seem to be looking good for Bittrex, as the company stated that it had assets and liabilities each estimated to be worth between $500 million and $1 billion, with over 100,000 creditors.
The SEC took action against Bittrex on April 17, alleging that the firm and its executives were promoting and selling unregistered securities. Bittrex has been denying these allegations, claiming that the assets it offered were not securities. However, the SEC seemed to take the law into its own hands with extrajudicial enforcement actions, as U.S. Congress has yet to officially classify crypto assets as securities.
To make matters worse, Bittrex had already announced the closure of its U.S. exchange in late March, due to the intensifying war on crypto from federal regulators. Adding insult to injury, the company was also fined $53 million in October for violating anti-money laundering (AML) laws.
Despite all the chaos, Bittrex Global, the company's Liechtenstein-based offshore operations, stated that it was not affected by the bankruptcy filing. And for those customers who did not withdraw their funds from the platform prior to the end of April, the funds remain safe and secure. Bittrex intends to ask the court for a reopening of customer accounts to allow them to withdraw.
The crypto markets have also taken a hit, dropping 1.8% today and decreasing total capitalization to $1.18 trillion. It seems that Bittrex's bankruptcy protection is another warning sign for those in the crypto space, and regulators are keeping a keen eye on any exchanges that may be operating outside of the law.
Image provided by Unsplash
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
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