Key Takeaways:
- Crypto exchange Bittrex filed for bankruptcy after SEC accusations.
- However, the global operations of the exchange will remain unaffected.
NEW DELHI (CoinChapter.com) — Crypto exchange Bittrex has become a victim of the US Securities and Exchange Commission’s war against cryptocurrencies. The exchange has filed for Chapter 11 bankruptcy for its US-based operations.
Bittrex filed for bankruptcy proceedings in the US Bankruptcy Court for the District of Delaware. The exchange noted that it had liabilities between $500 million and $1 billion. Additionally, the trading platform stated it had over 100,000 creditors and between $500 million and $1 billion.
Crypto trader Simon Dixon noted that Bittrex might be looking to figure out compliance issues in returning users’ funds. Interestingly, Bittrex’s largest creditor is the Office of Foreign Assets Control (OFAC), with the exchange owing more than $24 million to the Treasury body.
The OFAC enforces and administers Anti Money Laundering (AML) laws.
Meanwhile, the bankruptcy proceedings would not affect the exchange’s operations outside the US. Bittrex is based out of Liechtenstein.
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The exchange claimed its main priority was ensuring customers’ funds remained safe.
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 will be able to withdraw them
Bittrex said in its statement
The exchange shut its US operations on April 30 before starting the bankruptcy proceedings.
US Exchanges List Tokens Outlawed By The SEC
Meanwhile, US exchanges have listed over a dozen crypto assets whose sale the SEC has deemed illegal, per a Wall Street Journal report.
The SEC has declared 76 crypto assets, such as FLT, AMP, RLY, LUNA, ALGO, etc., as securities. Of these, 16 cryptocurrencies remain available for trading on one or more major exchanges.
Furthermore, the SEC made fraud allegations against nearly half of the crypto assets it considered a security. XRP, Ripple’s native token, has the highest market cap among the 76 crypto assets in SEC’s crosshairs.
Legal cases involving 32 tokens remain in litigation, while SEC won judgments in cases involving 14 tokens. Other cases settled.
SEC’s regulatory actions, combined with the crypto bear market, have forced bankruptcy on several firms in the crypto sector.
