A judge in Delaware has given the green light for Bittrex, a cryptocurrency exchange based in Seattle, to shut down under Chapter 11 bankruptcy. This decision came after the exchange faced serious charges from the SEC for allegedly operating without proper registration.
Facing Regulatory Heat
Earlier in April, the SEC pointed fingers at Bittrex and its founding team, including William Shihara, the former CEO, for running an exchange that wasn’t registered as a national securities exchange, broker, or clearing agency. The platform, which has been in business since 2014, reportedly pulled in revenues topping $1.3 billion. These allegations led Bittrex to seek protection through bankruptcy in May.
The SEC’s accusations centered on Bittrex’s offering of certain digital assets like OMG, Dash, and others, which the commission views as unregistered securities.
Smooth Exit Strategy
On the first day of the week, Judge Brendan Shannon of the bankruptcy court stamped approval on Bittrex’s plan to cease its operations in the United States. This approval, as reported by Reuters, means Bittrex can pay off its unsecured creditors completely. It’s important to note that Bittrex Global, the international counterpart of the exchange, remains unaffected by this U.S. shutdown.
Bittrex took a unique approach by asking its customers to withdraw their funds before filing for bankruptcy, unlike other crypto firms that have frozen customer accounts during such proceedings. Despite not being insolvent, Bittrex’s U.S. operations are coming to an end.
Unclaimed Assets Remain
As of September, a significant number of Bittrex customers hadn’t reclaimed their digital assets, with less than 3% responding to the court’s call. The exchange highlighted that customers needed to complete a thorough KYC procedure to retrieve their funds.