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Bittrex Files for Chapter 11 Bankruptcy amid Regulatory Challenges and Crypto Market Volatility

Cointelegraph | Turner Wright | May 8, 2023

Bittrex - Bittrex Files for Chapter 11 Bankruptcy amid Regulatory Challenges and Crypto Market Volatility

Cryptocurrency trading platform Bittrex has filed for Chapter 11 bankruptcy protection in the District of Delaware.  The firm estimated it had more than 100,000 creditors.

  • Bittrex, a prominent cryptocurrency trading platform, has filed for Chapter 11 bankruptcy protection in the District of Delaware.
    • The filing covers Bittrex entities in the U.S. and Malta, along with an affiliated entity. Bittrex Global GmbH, the global entity based in Liechtenstein, is excluded from the bankruptcy proceedings.
  • The bankruptcy filing is a result of ongoing regulatory challenges faced by Bittrex, including charges of securities violations from the U.S. Securities and Exchange Commission (SEC) and Bank Secrecy Act violations from the U.S. Treasury's Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN).
    • Bittrex had previously announced its decision to wind down its U.S. operations due to regulatory uncertainty in the country. The bankruptcy filing is seen as a step towards completing the wind-down process and resolving outstanding obligations.
    • Customer funds are stated to be safe and secure on the platform, with the responsibility for returning them resting with the court.

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  • Creditors: OFAC is the largest creditor listed on Bittrex's bankruptcy filing, with the exchange booking a $24.2-million claim for the Office. Its next largest creditor is a crypto wallet with a $14.5 million claim. FinCEN is also listed as a top 50 creditor with a claim of $3.5 million, the SEC is listed with an undetermined amount of claims.

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