In a dramatic turn of events, popular cryptocurrency exchange Bittrex has filed for Chapter 11 bankruptcy protection, just weeks after facing charges from the US Securities and Exchange Commission (SEC). The embattled company revealed in the filing that it has over 100,000 creditors and holds between $500 million and $1 billion in both assets and liabilities. The bankruptcy filing encompasses Bittrex’s Seattle-based headquarters, two entities in Malta, and its affiliate Desolation Holdings LLC, but spares its Liechtenstein-based global arm, Bittrex Global GmbH.
The SEC had accused Bittrex and its co-founder, William Shihara, of operating an unregistered securities exchange. Adding to the company’s woes, the US Treasury’s Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN) charged Bittrex with Bank Secrecy Act violations last October, resulting in a hefty $29 million settlement. Among the creditors listed in Bittrex’s bankruptcy filing, OFAC claims a staggering $24.2 million, while FinCEN is seeking $3.5 million. The SEC’s claim amount remains undetermined.
Bittrex’s downfall follows its announcement in March that it would cease US operations by April 30, citing “continued regulatory uncertainty” in the country. The company also laid off 83 employees in February due to the downturn in the crypto market, caused by collapses and bankruptcies among other crypto firms. Bittrex’s bankruptcy is the latest in a string of high-profile Chapter 11 filings, joining the ranks of FTX, BlockFi, Celsius, and Voyager Digital.