- Bittrex’s U.S. business has had a rough year.
- The firm has decided to throw in the towel.
- Mixed reactions have trailed Bittrex’s decision.
2023 has been challenging for Bittrex’s United States business. In February, the crypto exchange was forced to lay off over 80 employees, citing the harsh economic environment.
The firm later announced that it would be winding down business on U.S. shores on April 30, citing growing regulatory uncertainty. Despite this, the U.S. Securities and Exchange Commission did not hold back from slapping Bittrex with a lawsuit for the alleged operation of an unregistered securities exchange in the same month.
Sponsored
Bittrex has now filed for Chapter 11 bankruptcy protection in federal court in Delaware, per a statement on Monday, May 8. The largely unexpected decision has elicited mixed reactions from the crypto community.
Crypto Twitter Mixed on Bittrex Bankruptcy Decision
For many, Bittrex’s decision followed a growing theme of long-running crypto businesses folding as @0x_Prototype asserted, “Old crypto world dying fr.”
Fuzz Finance founder Michael Otis described it as the “End of an era.”
Polygon Vice President, Head of Growth Sanket Shah implied that the Bittrex bankruptcy was one of the fallouts of the increasingly hostile U.S. regulatory environment, highlighting Coinbase’s recent focus abroad and rumors surrounding Binance.US’s operations.
Others like Odysee Head of Operations Thomas Zarebczan were critical of Bittrex’s decision. Zarebczan questioned the exchange for taking on the legal costs of bankruptcy proceedings instead of just returning customer deposits.
Some, like Dan Saldana, a full stack developer and self-described Bitcoin advocate, alleged that the firm was looking to abscond with customer funds.
Despite these claims, the defunct crypto exchange has assured users that deposits are intact, declaring intentions to prioritize facilitating withdrawals.
Bittrex to Prioritize Customer Withdrawals
In its statement, Bittrex asserted that facilitating customer withdrawals would be a top priority while conceding that the court would ultimately decide the method for claims and distribution.
"For those customers who did not withdraw their funds from the platform prior to the end of April, your funds remain safe and secure, and our main priority is to ensure that our customers are made whole," the statement read.
In the company’s filing, Co-Chief Restructuring Officer Evan Hengel tipped a difficult regulatory and economic environment for Bittrex’s decision to file for bankruptcy, reporting a 97.4% decline in revenue from 2017 to 2022.
The company revealed assets and liabilities, each within $500 million and $ 1 billion, and over 100,000 creditors in the filing.
On the Flipside
- Bittrex’s global business is not included in the bankruptcy proceeding.
- Despite the firm’s assurances, it is unclear when and how customers can access their deposits.
Why You Should Care
Bittrex was once one of the largest crypto exchanges in the U.S. The reactions to Bittrex filing for Chapter 11 bankruptcy highlight the impact of its decision, while its filing highlights the increased difficulty U.S. crypto businesses face.
Learn more about the SEC case against Bittrex:
Why the SEC Case Against Bittrex Is Unique in a Sea of Crypto Lawsuits
Voyager has revealed new plans to compensate customers; read more:
Voyager Pledges 35.72% of Holdings to Customers in Initial Recovery
