Distressed Bittrex to borrow bitcoin to fuel bankruptcy proceedings
The US Bankruptcy Court for the District of Delaware has given Bittrex crypto exchange the go-ahead to borrow an initial 250 BTC ($6.8 million at current prices) to fuel its bankruptcy proceedings. Bittrex filed for bankruptcy in the US on May 8.
Having successfully filed a Chapter 11 bankruptcy in the US earlier this week, the Bittrex crypto exchange has been approved by US Bankruptcy Judge Brendan Shannon to obtain bitcoin (BTC) loans from its parent company, Aquila Holdings, to kickstart its bankruptcy proceedings.
According to sources, the embattled exchange can borrow an initial 250 BTC (roughly $6.8m). It could seek permission to obtain an additional 450 BTC later in June.
The bankruptcy court has also granted the exchange temporary privacy protection, allowing it to remove the personal information of its customers from court documents. Sources say Bittrex has since stopped accepting deposits from its US customers and had asked them to withdraw their crypto from its platform before filing for bankruptcy.
The loan will make it easier for Bittrx to fully reimburse all its US customers and finalize its Chapter 11 bankruptcy.
US regulatory bottlenecks are stifling innovation
The lack of regulatory clarity for crypto in the US makes life quite difficult for market participants.
The dreaded US Securities and Exchange Commission (SEC) sent a Wells Notice to Bittrex last month, alleging that the exchange failed to come under its purview as a clearinghouse, broker-dealer, or business.
At the time, the exchange condemned an SC’s enforcement action against it, with Oliver Lich, CO of Bittrex Global, publicly voicing his displeasure over the exchange’s lack of communication with market participants.
With no solution to the SEC’s draconian enforcement-style regulation in sight, top crypto businesses in the US are increasingly securing licenses abroad, If the regulatory onslaught continues, it won’t be a surprise to see most of these innovative businesses abandoning the country.
