Bittrex Receives Court Approval for Revised Bankruptcy Plan
Seattle-based cryptocurrency exchange Bittrex has been granted court approval to move forward with its revised bankruptcy plan, which aims to wind down its operations in the United States. The approval came during a hearing in Delaware on September 30, where Judge Brendan Shannon gave the green light for the liquidation plan, which intends to repay the remaining creditors. This decision resolves the informal comments made by the Securities and Exchange Commission (SEC).
Background on Bittrex’s Bankruptcy Proceedings
Bittrex initially filed for bankruptcy protection in May after facing charges from the SEC for running an unregistered securities exchange. The SEC accused Bittrex of collaborating with crypto asset issuers to remove statements that could have triggered a securities investigation. In response, Bittrex closed its US operations and reached a $24 million settlement with the SEC in August.
Impacts on Bittrex Global and Customer Accounts
It is important to note that Bittrex’s bankruptcy proceedings do not affect its international arm, Bittrex Global, which serves customers outside of the US. The company’s overseas operations are based in Liechtenstein. Unlike other crypto firms that declared bankruptcy recently, Bittrex did not face funding shortages or restrict customer access to accounts initially. The company advised customers to withdraw their assets before officially filing for bankruptcy. During the proceedings, approximately 36,000 customers withdrew around $143 million in crypto assets. The majority of remaining accounts hold less than $100 in assets.
Customer Sentiment and Asset Abandonment
Some customers decided to abandon their assets rather than go through the identity verification process required for withdrawals. Patricia Tomasco, attorney for Bittrex, explained that many customers felt it was not worth providing personal information for small amounts of money. “The sentiment is, I don’t want to give you all that information to get $35,” she said.
Hot Take: Bittrex’s Bankruptcy Approval Marks a Step Towards Closure
The court’s approval of Bittrex’s revised bankruptcy plan signifies progress towards winding down the exchange’s operations in the US. With a settlement reached with the SEC and customer withdrawals largely completed, Bittrex can now focus on repaying its remaining creditors. The impact on Bittrex Global is minimal, as it continues to serve customers outside the US. However, it is worth noting that some customers chose to abandon their assets rather than comply with identity verification requirements. This raises questions about privacy concerns and the threshold at which individuals are willing to provide personal information. Moving forward, Bittrex will need to navigate these challenges while working towards a successful resolution.
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