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Bittrex, following a legal dispute with the SEC, has been granted approval by the bankruptcy court to close its U.S. operations. As part of the process, the company will systematically wind down its activities, ensuring full payment to the remaining creditors. Importantly, Bittrex’s financial situation did not involve a funding shortfall, and customers were given the opportunity to withdraw their funds before the bankruptcy filing.
Bittrex’s SEC Settlement and the Peculiar Path to Bankruptcy
Bittrex’s decision to seek bankruptcy protection in May came on the heels of SEC allegations regarding its operation as an unregistered securities exchange. In a departure from the norm in the crypto industry, the company opted to voluntarily shutter its U.S. operations, prioritizing the return of customer assets. This strategy culminated in a notable $24 million settlement with the SEC by August. Notably, Bittrex’s approach stands out for not encountering a funding shortfall and ensuring uninterrupted customer access to their accounts.
Ahead of their bankruptcy filing, Bittrex took a proactive stance, encouraging customers to initiate fund withdrawals. This approach was underpinned by the company’s careful financial planning, with an estimation that surplus funds would remain post-customer withdrawals, considering factors such as dormant or abandoned accounts. Notably, a significant majority of the remaining Bittrex accounts hold assets valued at less than $100.
It’s important to underscore that Bittrex’s international arm, Bittrex Global, stationed in Liechtenstein, remains unscathed by the bankruptcy proceedings. Highlighting the success of this user-focused approach, Bittrex’s attorney, Patricia Tomasco, confirmed that customers had successfully withdrawn approximately $143 million in cryptocurrency during the bankruptcy process. The closure of Bittrex’s U.S. operations ultimately marks the conclusion of a challenging chapter in the exchange’s history.
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