Bittrex, a cryptocurrency trading platform, has filed for Chapter 11 bankruptcy protection in the District of Delaware. The bankruptcy proceedings cover Bittrex’s Seattle-based entity, two entities in Malta, and an affiliated entity called Desolation Holdings LLC.
The filing estimates more than 100,000 creditors, between $500 million and $1 billion in assets, and between $500 million and $1 billion in liabilities. However, the filing does not include Bittrex Global GmbH, the Liechtenstein-based global entity for exchange. The declaration of bankruptcy comes after the US Securities and Exchange Commission (SEC) charged Bittrex and its co-founder and former CEO William Shihara for securities violations in April.
The SEC claimed that Bittrex, Inc and Bittrex Global operated an unregistered securities exchange. Additionally, the exchange received charges about Bank Secrecy Act violations from the US Treasury’s Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN) and agreed to pay around $29 million in a settlement.
Bittrex listed OFAC as its largest creditor with a $24.2 million claim, followed by a crypto wallet with a $14.5 million claim. Bittrex’s bankruptcy is the latest in several other crypto exchanges or lending platforms recently filed for Chapter 11 protection, including FTX, BlockFi, Celsius, and Voyager Digital.
