Bittrex Files for Bankruptcy Following Closure of US Cryptocurrency Platform

As Reported by Bloomberg News: Bittrex Inc., along with multiple subsidiaries, filed for bankruptcy on Monday following the termination of its US operations in late April due to increased regulatory scrutiny. The bankruptcy will not affect the company's non-US operations.

The US Securities and Exchange Commission (SEC) accused the cryptocurrency platform of violating securities regulations for several years, less than a month before the bankruptcy filing. Bittrex Global, however, will maintain regular operations for clients outside the United States, as mentioned in a company statement. Bittrex aims to request court permission to reactivate accounts for users who were unable to withdraw their assets prior to the shutdown, provided they meet necessary regulatory requirements.

In its Chapter 11 filing, Bittrex reported assets and liabilities of up to $1 billion each. Related companies Desolation Holdings LLC, Bittrex Malta Holdings Ltd., and Bittrex Malta Ltd. also filed for bankruptcy, as indicated by court documents.

The SEC sued Bittrex in federal court last month, claiming it violated the regulator's rules between 2017 and 2022 while generating at least $1.3 billion in revenue. According to the SEC, Bittrex functioned as a brokerage, exchange, and clearing agency at different times but failed to register with the SEC. Bittrex contested the allegations in a statement at the time.

This is just the latest in a series of regulatory challenges for Bittrex. In its bankruptcy filing, the company named the US Treasury's Office of Foreign Assets Control as its largest unsecured creditor, owing $24 million from a previous settlement for neglecting to prevent users from Iran, Cuba, and other sanctioned countries from accessing its platform.

The bankruptcy case is Desolation Holdings LLC, 23-10597, US Bankruptcy Court for the District of Delaware.