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Seattle-based digital currency platform Bittrex has filed for bankruptcy protection following a recent lawsuit by the U.S. Securities and Exchange Commission (SEC) over running an unauthorized securities exchange. Bittrex has temporarily ceased operations in the U.S. However, it has been highlighted that the move will not impact Bittrex Global, its international branch.
The company's non-U.S. operations are based in Liechtenstein. The bankruptcy request submitted in a Delaware court has revealed that Bittrex's assets and liabilities range from $500 million to $1 billion. Bittrex disclosed that despite the filing, it continues to hold crypto assets belonging to American clients who missed the deadline to withdraw their funds. The company has pledged to attempt to reopen customer accounts and return digital currency to its rightful owners. Bittrex maintained that all assets were secure.
In a separate development, the company has denied accusations contained in the SEC suit that former CEO William Shihara pressured crypto asset issuers who approached Bittrex to eliminate public statements that could trigger regulatory inquiries. The bankruptcy filing also listed the Office of Foreign Assets Control of the U.S. Treasury Department as the company's most significant unsecured creditor; there is just over $24 million owed to the organization. Except for a client with $14.6 million in assets, whose name has not been revealed, most of the company's high-ranking creditors are clients of the cryptocurrency exchange.
The SEC enforces regulations on the cryptocurrency market by clamping down on digital exchanges through various crackdowns. Selecting cryptocurrencies as securities has come with strict regulations, including registration with the SEC.
Leading cryptocurrency exchanges, such as Coinbase, Kraken, and Binance, have faced SEC enforcement at different levels, ranging from legal battles to temporary shutdowns, in their operations. This action comes as the SEC looks to protect investors and impose itself on the growing cryptocurrency market.
