In a recent move, the now-bankrupt US crypto exchange Bittrex has sent out an email to its customers who still have funds on their platform, strongly advising them to withdraw their assets “as soon as possible”. The users are given a deadline until August 31 but are recommended to act promptly to allow for potential resolutions of unexpected problems.
According to the communication, “Customers who meet the necessary regulatory requirements” can access their accounts and pull out any remaining assets. The message indicates that customers adhering to the required regulatory standards have the ability to access their accounts. They can then withdraw any funds they still have.
On June 15, Bittrex Inc., the US offshoot of Bittrex Global, initiated payouts to customers without further legal claims against the company. Bittrex Inc. procured an interim loan of 250 bitcoins from its parent entity, Aquila Holdings, to facilitate the reimbursement to its customers. This move was resisted by the US government, claiming the firm was still indebted for millions due to sanctions violations.
It’s important to note that withdrawal alerts were initiated when the company suspended deposits in April. Following this, in May, the crypto exchange declared bankruptcy in Delaware, highlighting the ambiguities in regulatory frameworks as the primary cause. Bankruptcy Judge Brendan Shannon authorized the innovative Bitcoin loan, emphasizing its favorable 4% interest rate and measures to manage price fluctuations.
Bittrex’s decision to file for bankruptcy was primarily driven by its declaration that the firm’s operations were no longer financially feasible under the prevailing US regulatory and economic landscape. This pressure was traceable to October when the company consented to a $29 million penalty the US Treasury Department levied for alleged violations of sanctions and anti-money laundering (AML) protocols.
Adding to its troubles, the Securities and Exchange Commission (SEC) initiated a lawsuit claiming Bittrex prompted crypto issuers to erase public statements that might spark probes into unauthorized securities. Bittrex rejected these claims, emphasizing that its listed assets did not qualify as securities or investment contracts.
Interestingly, court documents revealed that most of Bittrex’s users were not US-based. Affiliated exchanges in Liechtenstein and Bermuda constituted around 77% of the firm’s vast 5.4 million user base as of March 27.
