Crypto exchange Bittrex is approved to borrow $6.8 million in bitcoin to fund its US Chapter 11 bankruptcy.
In the court hearing, which took place this week in Wilmington, Delaware, Bittrex’s lawyers said the exchange had enough crypto to return customer funds. The loan would instead be used to protect and ensure a smooth bankruptcy process for both customers and the company.
According to a Reuters report, Judge Brendan Shannon approved the loan, allowing Bittrex to borrow 250 bitcoin (BTC) on an interim basis from Aquila Holdings — its parent company.
Seattle-headquartered Bittrex is expected to ask for an additional 450 BTC ($12.2 million) in June. The company filed for bankruptcy on May 8.
However, it halted US operations at the end of April, days before the SEC sent both Bittrex US and Bittrex Global a Wells notice and sued Bittrex US for running an unregistered securities exchange. Bittrex Global is incorporated in Liechtenstein.
In the suit, the SEC alleges that six of the tokens listed on Bittrex fall under the definition of securities under current law, including algorand (ALGO) and DASH. Bittrex did not immediately return a request for comment.
Bittrex Global CEO Oliver Linch previously told Blockworks the decision to shutter Bittrex US came because “we only believe in doing the right thing and we, literally, can’t because we don’t know what that means.”
According to Linch, neither Bittrex US nor Bittrex Global were given the opportunity to respond to the SEC’s Wells notice, though lawyers from Bittrex have been in contact with the SEC since.
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Source: https://blockworks.co/news/bitcoin-loan-can-help-fund-bittrex-bankruptcy-court-rules