Crypto Exchange Bittrex Files for Chapter 11 Bankruptcy
On Monday, May 8th, the cryptocurrency exchange Bittrex filed for Chapter 11 bankruptcy in Delaware. The move comes after a series of setbacks for the company which announced a departure from the US in late March and became the target of an SEC enforcement action in mid-April.
After Departing the US, and Getting Sued by the SEC, Bittrex Files for Bankruptcy
With around $500 million and more than 100,000 creditors, the cryptocurrency exchange Bittrex filed for Chapter 11 bankruptcy on Monday, May 8th. Interestingly, the company’s single largest creditor is OFAC with which the exchange agreed to settle over alleged sanctions violations in late 2022.
The move comes after a string of setbacks that rocked the exchange over the previous months. At the very end of March, Bittrex announced its departure from the US market citing regulatory uncertainty and the lack of willingness among lawmakers to create to foster “sensible policies”.
Additionally, Bittrex was sued by the Securities and Exchange Commission for allegedly violating securities laws. At the time, the company expressed its disappointment with the SEC’s decision and accused its Chair, Gary Gensler, of being on a “crusade” against the entire cryptocurrency industry.
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From Contagion to Regulation: The Many Crypto Bankruptcies Since November
While the digital assets industry has been under increased pressure since the LUNA crash of May 2022 that sent multiple companies into bankruptcy, things appeared to have settled by late last year. November, however, brought another calamity in the form of the collapse of Sam Bankman-Fried’s FTX.
Due to the company’s size and extensive connections across the industry, FTX’s downfall immediately spread fears of a looming contagion. The concerns have been proven correct since the collapse both triggered a string of new bankruptcies and made the situation significantly more complicated for some of the victims of the LUNA crash like Voyager Digital.
Additionally, recent months have seen an uptick in enforcement actions targeting the digital assets industry, The regulatory pressure has already forced several companies like Bittrex and Nexo to depart the United States. Furthermore, it has placed multiple well-respected companies, Coinbase being perhaps the most high-profile example, into its crosshairs igniting fears that the watchdogs may be trying to drive cryptocurrencies entirely out of the country.
What major cryptocurrency company will be the next to file for bankruptcy? Tell us what you think in the comments below.