Crypto exchange Bittrex has filed for bankruptcy in the U.S. state of Delaware on Monday, months after announcing it would wind down operations in the country and weeks after being sued by the Securities and Exchange Commission (SEC).
The exchange believes it has more than 100,000 creditors, with estimated liabilities and assets both within the $500 million to $1 billion range, according to a court filing shared by Randall Reese of Chapter 11 Dockets, a bankruptcy tracker.
Despite Bittrex's impending exit from the U.S., the SEC sued it in mid-April on allegations it operated a national securities exchange, broker and clearing agency. The SEC also sued former Bittrex CEO Bill Shihara and Bittrex Global. Bittrex Global CEO Oliver Linch said last month that the exchange intended to fight these charges in court, but a bankruptcy proceeding may make this more difficult.
Bittrex is the latest crypto entity to file for bankruptcy, joining fellow exchange FTX and a host of lenders like Celsius, Voyager and BlockFi.
In filings made at the Delaware Court, Evan Hengel, the company's Co-Chief Restructuring Officer of Bittrex, said that customers would get a "100 percent like-kind cryptocurrency distribution" under its liquidation plan, enabling them to access the Bittrex platform and withdraw their crypto.
The company "faced an untenable regulatory and economic environment" given "the lack of regulatory clarity in the U.S. [which] created a substantial negative economic impact on the digital asset industry and resulted in overlapping regulatory burdens and soaring regulatory costs," Hengel said.
Richie Lai, co-founder and Chief Executive Officer of the company, tweeted that the bankruptcy filing was the "cleanest way to bury the baby," but that Bittrex "still have 100% of all customer funds."
UPDATE (May 9, 07:30 UTC): Adds comments from Evan Hengel, Richie Lai.
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.