Bittrex has filed for Chapter 11 bankruptcy protection in the U.S., weeks after an enforcement action from the Securities and Exchange Commission (SEC).
In a press release shared on Monday, Bittrex announced that it had filed for bankruptcy in a federal court in Delaware. The crypto exchange said the development would not impact any of its business outside the U.S., which falls under the umbrella of Bittrex Global.
The decision comes after the exchange ceased all U.S.-based operations on April 30.
“For those customers who did not withdraw their funds from the platform prior to the end of April, your funds remain safe and secure, and our main priority is to ensure that our customers are made whole,” said Bittrex.
The firm also faces a lawsuit from the SEC alleging that the Bittrex operated an unregistered securities exchange. In the same lawsuit, the regulator further claimed that Bittrex CEO William Shihara coordinated with token issuers to delete public statements that could open them up to an investigation.
Bittrex estimates that it has more than 100,000 creditors and between $500 million and $1 billion in both assets and liabilities, according to the firm’s bankruptcy filing.
Bittrex bankruptcy filings list more than $500 million in both assets and liabilities, and more than 100,000 creditors pic.twitter.com/eBn2Q5yiem
— Randall G. Reese (@Chapter11Cases) May 8, 2023
The filing also lists the exchange’s top 50 creditors, with the largest one being the U.S. Treasury’s Department of Office of Foreign Asset Control (OFAC). Bittrex owes the agency $24 million pertaining to a settlement concerning the exchange’s alleged sanctions violations. The SEC is also included in this list of creditors with a claim amount that is still yet to be determined amid the impending litigation costs and fines that will likely follow.
Most of the other large unsecured creditors are customers of the exchange whose names have been withheld, although their wallet addresses are displayed in the filing. At least 17 customers have an unsecured claim of more than $1 million on Bittrex.