Bankrupt crypto exchange Bittrex to enable withdrawals
The US division of cryptocurrency exchange Bittrex is planning to begin client withdrawals on June 15 after a ruling by a Delaware bankruptcy court.
After declaring bankruptcy in May, the United States government fought Bittrex’s efforts to restore customer access to their assets, claiming millions in unpaid penalties for sanctions breaches.
On June 13, Judge Brendan Shannon issued an order allowing Bittrex U.S. and its affiliates to facilitate the withdrawal of cryptocurrency assets and fiat cash from the platform on behalf of clients whose claims were uncontested, noncontingent, and resolved.
However, the judgment does not determine who owns the assets or how government claims compare to individual customers. It also leaves the door open for possible clawbacks in the future.
Bittrex’s legal counsel, Patty Tomasco of Quinn Emmanuel, through an email made public on June 15 gave the information on the planned resumption of withdrawals.
After stating in March that it would end U.S. operations, Bittrex saw a flood of withdrawal requests in the weeks leading up to its bankruptcy filing on May 8. The company’s U.S. arm has $300 million in client cash and bitcoin as of May 10.
To prevent protracted litigation, the firm requested that customers be allowed access to their cash throughout the bankruptcy process, which is unusual.
Bittrex, like Binance and Coinbase, has been accused by U.S. officials of breaking the law by running an unregistered securities exchange.
