Crypto exchange Bittrex announced it filed for Chapter 11 bankruptcy in federal court in Delaware following a Securities and Exchange Commission (SEC) investigation and suit and the decision to cease operations in the U.S. in April.
Bittrex stated in its court filings it had more than 100,000 creditors, with estimated liabilities and assets both in the $500 million to $1 billion range.
Despite having announced its intentions to exit the U.S. market, Bittrex faced an investigation and suit from the SEC on allegations it operated an unregistered national securities exchange, broker, and clearing agency. The SEC also sued former Bittrex CEO Bill Shihara and Bittrex Global.
In a filing made by Bittrex Co-Chief Restructuring Officer Evan Hengel, customers would get a “100 percent like-kind cryptocurrency distribution” under its liquidation plan, enabling them to access the Bittrex platform and withdraw their cryptocurrencies.
Hengel blamed the “lack of regulatory clarity in the U.S.” for creating “a substantial negative economic impact on the digital asset industry” and “overlapping regulatory burdens and soaring regulatory costs, on both the state and federal level.”
Bittrex “faced an untenable regulatory and economic environment that compelled [it] to initiate a restructuring process and an orderly wind down of their U.S. operations,” Hengel added.
A tweet from Bittrex co-founder and CEO Richie Lai stated the bankruptcy filing was the “cleanest way to bury the baby,” but that Bittrex “still had 100 percent of all customer funds.”