- The insolvency extends to two Bittrex entities in Malta and one in Seattle
- Bittrex stills owes OFAC over $24 million
Cryptocurrency exchange Bittrex has filed for Chapter 11 bankruptcy protection in the District of Delaware, leading media sources reported. In the filing dated May 8, the exchange estimated its assets and liabilities at $500 million - $1 billion each. It also had more than 100,000 creditors, it emerged during bankruptcy proceedings.
The insolvency extends to several entities, including two in Malta and one in Seattle. Liechtenstein-based entity Bittrex Global GmbH was not included in the filing.
SEC charge preceded bankruptcy filing
In April, the US Securities and Exchange Commission (SEC) charged Bittrex and its former CEO William Shihara with violating securities laws. According to the regulator, Bittrex Inc and Bittrex Global ran an unregistered securities exchange.
In October last year, Bittrex was charged with violating the Bank Secrecy Act. The exchange paid the Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN) a settlement of around $30 million.
OFAC is their main creditor
Bittrex still owes OFAC quite a bit of money. The law enforcement agency is the biggest creditor listed on the exchange's bankruptcy filing. It owes them $24.2 million.
FinCEN is much further down on the list, but still in Bittrex’s top 50 creditors. Their claim amounts to $3.5 million. The number and amount of SEC claims are not determined.
The latest in a series of sector bankruptcies
Bittrex's bankruptcy is the latest in a series of sector failures, including highly publicized ones like FTX, BlockFi, crypto lender Celsius and Voyager Digital.
In March, Bittrex announced it was winding US operations down due to "continued regulatory uncertainty" in the country.
Bittrex laid off 83 employees earlier this year, citing the crypto bear market, to which the collapses and insolvencies of other companies in the industry have contributed.
Brief history of the exchange
Bittrex was founded in 2014 by three ex-Amazon cyber security engineers. The platform quickly gained a considerable following of active users. It let users purchase or sell cryptocurrency, leverage trade, and participate in staking programs.
Contributors
