Cryptocurrency exchange Bittrex Inc. filed for bankruptcy protection following claims by the US Securities and Exchange Commission (SEC) that it had an unregistered stock exchange. The Seattle-based company closed its American operations on April 30 and filed for bankruptcy in Wilmington, Delaware, claiming that the value of its assets and liabilities was between $500 million and $1 billion. dollars
Bittrex has denied the SEC’s allegations, claiming that the crypto assets on its platform were not securities or investment contracts. However, it had agreed to pay the US Treasury Department $29 million in fines for “apparent violations” of the law’s anti-money laundering and sanctions provisions against specific nations.
Bittrex’s non-US operations in Liechtenstein, which serve customers outside the US, will not be affected by the bankruptcy case. A restricted reopening of customer accounts is what the company plans to request in bankruptcy court to return crypto assets to customers who are US citizens but did not withdraw money by April 30.
Bittrex’s bankruptcy filing is the latest setback for the cryptocurrency industry, which has seen several companies fail over the past year as a result of falling asset values, increased regulatory attention and legal issues. While the SEC action against the company is ongoing, the future of Bittrex is uncertain.
