Bittrex, a leading digital asset exchange, has received the green light from U.S. Bankruptcy Judge Brendan Shannon to proceed with its bankruptcy wind-down plan. This momentous decision, rendered on October 30, 2023, underscores Bittrex’s commitment to addressing its financial obligations.
The U.S. arm of Bittrex sought Chapter 11 bankruptcy protection back in May, initiating a complex legal process. During a recent hearing in Delaware, Judge Brendan Shannon approved the exchange’s liquidation plan, which outlines the path to repay the outstanding debts to its remaining creditors. The court’s decision is a pivotal step forward in this ongoing financial endeavor.
Back in April, the U.S. Securities and Exchange Commission (SEC) initiated legal action against the U.S. branch of the exchange and its co-founder, William Shihara. The SEC alleged that the exchange had been operating in the United States without proper registration as a securities exchange, broker, and clearing agency. Simultaneously, the regulatory body also filed charges against Bittrex Global for its failure to register as a “national securities exchange.”
The SEC’s accusations went further, claiming that Bittrex and Shihara had been instructing token listing applicants to remove any social media content that involved discussions about price forecasts, anticipated profits, or any investment-related subjects. Gurbir S. Grewal, the head of the SEC’s enforcement division, expressed, “For years, Bittrex collaborated with token issuers to sanitize their online statements, erasing any indications of being investment contracts, all in an attempt to circumvent federal securities regulations. Their efforts were in vain.”
Once a heavyweight in the U.S. cryptocurrency exchange landscape, Bittrex had a substantial market share, boasting almost 23% support in early 2018, however, its fortunes took a sharp downturn, plummeting to below 1% in 2021, and it has struggled to regain its former stature ever since. Nevertheless, Bittrex’s progress in its bankruptcy case is poised to set a precedent for future financial restructuring within the cryptocurrency sector.
