Bittrex’s U.S. and Maltese arms processed $425 million in withdrawals since the exchange announced it would shut down its U.S. operations around April 1, its attorney told a Delaware bankruptcy court on Wednesday.
The exchange filed for bankruptcy on Monday, citing regulatory uncertainty, after its assets under management had fallen nearly 80% in just two years.
Susheel Kirpalani, representing Bittrex, said the firm had not indulged in the kind of bad behavior that has been alleged of others in the crypto industry – and perhaps had suffered financially because of that.
“Bittrex did not hypothecate, or loan out, or put at risk any of its customers’ deposits,” Kirpalani said. “As a result, it also has difficulty generating revenues, particularly if the regulatory environment that it operates in restricts or starts questioning the ability to permit trading.”
“We will do everything within our power that we can reach customers who, for whatever reason, have gone dark,” Kirpalani added, saying that he believed there will be a “substantial amount” of estate assets that go unclaimed.
The U.S. arm holds $50 million in customer cash and $250 million in customer crypto, and the Maltese operating company which has also filed for bankruptcy has $120 million in customer cash and crypto, Kirpalani said, with assets matching liabilities in each of those cases.
Kirpalani, of law firm Quinn Emanuel Urquhart & Sullivan, also cited as estate assets over $3 million of the company’s own cash and crypto.
The company had a median value of just $566 million of assets under management in 2023, down from $2.7 billion in 2021, he said. Together with Bittrex Global GmbH and a Bermuda entity – two affiliates catering for non-U.S. business which haven’t filed for bankruptcy – the company has 1.5 million active users, of which 600,000 are in the U.S, Kirpalani added.
Bittrex announced its intention to wind down in the U.S. on March 31, citing an uncertain regulatory and economic environment. On April 17, the U.S. Securities and Exchange Commission said the company had failed to register as an exchange, broker or clearing agency, an allegation which Bittrex executives have said they will challenge.
A further hearing under Judge Brendan Shannon has been set for June 7.
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