Bittrex Exchange Files for Chapter 11 Bankruptcy in Delaware

Bittrex, one of the erstwhile digital currency trading platforms in the United States, has filed for Chapter 11 bankruptcy in Delaware as the regional arm of the exchange hit brick roads in its operations. According to the filing made by the firm, it said its creditor numbers up to 100,000 and its assets and liabilities fall within the $500 million to $1 billion range.

According to the details shared, the bankruptcy did not affect the Bittrex Global brand, meaning only the US entity will be liquidated. The trading platform’s operations in the US have been largely tumultuous thus far this year as the regulatory uncertainties, coupled with the broader onslaught in the tech sector kept weighing on its growth.

Notably, Bittrex has been downsizing in a bid to cut the cost of operations by a significant percentage. In one of its emphatic actions this year, Bittrex laid off 80 of its staff in February, a move that appears not to have caused any significant changes.

As announced earlier, Bittrex has plans to exit its operations in the US by the end of April. This bankruptcy filing appears not to be so much of a worry to the exchange’s users and investors who had been preparing their minds for an impending exit.

The shift toward bankruptcy was further accelerated by the lawsuit slapped on the exchange by the Securities and Exchange Commission (SEC) back in April. The United States market regulator said Bittrex operated an illegal trading entity that also combined being a national securities exchange, broker and clearing agency.

The SEC lawsuit also named former Bittrex CEO Bill Shihara and Bittrex Global. This lawsuit is not uncommon with the regulator as it has cracked down on other exchanges thus far this year. Bittrex has earlier positioned its plans to fight the SEC in Court and it remains uncertain what the future holds now that the exchange has filed for bankruptcy.

Bittrex Bankruptcy: One in Many

While filing for bankruptcy is not particularly a good showoff for Bittrex, the reality is that the exchange will not be the first to go under over the past few months.

With FTX Derivatives Exchange, Genesis Global and BlockFi among the firms that have filed for bankruptcy in the past year, the crypto ecosystem appears used to the bad news at this time. The bankruptcy of Bittrex and that of FTX differ in a notable way and that is the fact that the former claimed its creditors will have access to their funds as will be determined by the court. The company wrote:

“For those customers who did not withdraw their funds from the platform prior to the end of April, your funds remain safe and secure, and our main priority is to ensure that our customers are made whole. While the Bankruptcy Court will ultimately decide the method by which those funds can be claimed by and distributed to our customers, we intend to ask the court to activate those accounts as soon as possible so that customers meeting the necessary regulatory requirements…”

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Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.