Bittrex Receives Approval to Cease Operations in the US
On October 30, the US bankruptcy court granted permission for major crypto exchange Bittrex to close down its operations in the United States and sell off its assets to repay creditors. Despite this move, Bittrex’s international arm based in Lichtenstein will continue serving customers in other jurisdictions.
Judge Approves Bittrex’s Bankruptcy Plan
Judge Brendan Shannon of the US Bankruptcy Court for the District of Delaware has approved Bittrex’s revised Chapter 11 bankruptcy plan, signaling the end of the firm’s nearly decade-long business in the country. The decision comes after Bittrex announced its withdrawal from the US due to unclear crypto regulations that made operations unfeasible.
SEC Allegations and Lawsuit
Shortly after announcing its plans to exit the US market, Bittrex received a Wells notice from the Securities and Exchange Commission (SEC), followed by a lawsuit. The SEC alleged that Bittrex and its co-founder violated securities laws, claiming that six tokens listed on the platform were securities. As a result, Bittrex filed for Chapter 11 bankruptcy and urged customers to withdraw their funds.
International Affiliate Unaffected
Bittrex initially challenged the SEC’s charges but later reached a settlement with a $24 million payment. However, industry stakeholders criticized the SEC’s actions, arguing that it did not have authority over regulating secondary markets for cryptocurrencies. While Bittrex exits the US market, its international affiliate, Bittrex Global, will continue providing services to clients in other regions.
Hot Take: Bittrex Shuts Down US Operations Amid Regulatory Uncertainty
Due to unclear crypto regulations and ongoing legal battles with the SEC, Bittrex has decided to cease its operations in the United States. The move comes after years of serving customers in the country. While this decision allows Bittrex to focus on its international affiliate, it highlights the challenges faced by crypto exchanges operating in a regulatory gray area. As the crypto industry continues to evolve, clear and comprehensive regulations are crucial for fostering innovation and ensuring a fair and transparent marketplace.
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