Might 8 (Reuters) – Cryptocurrency trade Bittrex Inc filed for chapter safety on Monday, three weeks after the U.S. Securities and Change Fee (SEC) accused it of working an unregistered securities trade.
Seattle-based Bittrex ceased operations in america on April 30, and it mentioned the chapter submitting wouldn’t impression Bittrex International, which serves clients outdoors america. The corporate’s non-U.S. operations are based mostly in Liechtenstein.
Bittrex’s property and liabilities had been each between $500 million and $1 billion, in response to a chapter petition filed in Wilmington, Delaware court docket.
Bittrex mentioned that it was nonetheless holding crypto property of U.S. clients who didn’t withdraw funds earlier than April 30.
These property are “protected and safe” and Bittrex mentioned it meant to ask the chapter court docket for a restricted re-opening of buyer accounts in order that the crypto could possibly be distributed again to clients.
A number of corporations within the crypto business have tumbled into chapter 11 over the previous yr, felled by a drop in asset costs, renewed regulatory scrutiny, and within the case of the once-prominent trade FTX, legal expenses.
The SEC sued Bittrex on April 17, alleging that former CEO William Shihara inspired crypto asset issuers looking for to make their tokens obtainable on the corporate’s platform to delete public statements that might lead regulators to research these token choices as securities.
Bittrex has denied the SEC’s allegations, saying the crypto property on its platform weren’t securities or funding contracts.
Whereas the SEC’s lawsuit stays pending, Bittrex had beforehand agreed to pay $29 million in fines to the U.S. Treasury Division for “obvious violations” of sanctions on sure nations and anti-money laundering legislation.
Bittrex’s petition listed the Treasury Division’s Workplace of Overseas Asset Management as the corporate largest unsecured creditor, with greater than $24 million owed to the company.
Bittrex’s different largest collectors had been principally clients of the crypto trade. Bittrex listed 16 clients with no less than $1 million of their accounts, with out figuring out them by identify. Bittrex’s largest remaining buyer account has $14.6 million in property, in response to the petition.
Reporting by Dietrich Knauth; Modifying by Mark Porter
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