Three weeks after the United States Securities and Exchange Commission (SEC) accused the cryptocurrency exchange Bittrex Inc. of running an unregistered securities exchange, Bittrex Inc. filed for protection under the bankruptcy code on Monday. The American cryptocurrency exchange said that it had more than 100,000 creditors, and both its obligations and assets were believed to be in the region of $500 million to $1 billion.
Bittrex, a cryptocurrency exchange headquartered in Seattle, shut down its operations in the United States on April 30, and the company has said that the bankruptcy filing would not affect Bittrex Global, which provides services to clients located outside of the United States. Liechtenstein serves as the headquarters for all of the company’s activities outside of the United States.
In its criminal complaint, the SEC stated that the exchange had failed to register as a broker-dealer, exchange, and clearing agency, and that it had made at least $1.3 billion in illegal income between 2017 and 2022. Additionally, the SEC alleged that the exchange had failed to register as a clearing agency.
Bittrex announced in March that it will be closing its operations in the United States. CEO Richie Lai listed the “current U.S. regulatory and economic environment” as reasons for the company’s decision to close its U.S. offices. Customers in the United States were given the assurance that their money would be secure by the exchange at the time.
Bittrex has already agreed to pay $29 million in penalties to the U.S. Treasury Department for “apparent violations” of sanctions on particular nations and anti-money laundering rules. This agreement is still in effect, even though the SEC’s case is still in the process of being processed.