06-14-2023, 07:51 PM
Bankrupt Bittrex to Begin Customer Payouts despite US Objections
<p class="MsoNormal">The
American branch of the Bittrex crypto exchange, which declared <a href="https://www.financemagnates.com/terms/b/bankruptcy/" class="terms__main-term" id="41b3ef0d-d805-441d-8443-121890264e94">bankruptcy</a> over
a month ago, is prepared to pay out funds to its customers. The process is set
to begin tomorrow (Thursday), driven by a decision from the Delaware bankruptcy
court. </p><p>Bittrex Customers to
Regain Their Funds</p><p class="MsoNormal">In
yesterday's (Tuesday) verdict, Judge Brendan Shannon authorized Bittrex US to
pay customers who do not have any additional legal claims against the platform.
</p><p class="MsoNormal">However,
the latest decision does not clarify who is the legal owner of the cash and
cryptocurrencies frozen in the accounts of the American branch of the exchange.
In addition, it does not explain whether the claims of end customers are more important
than the claims of the US government against the exchange. The judge also
acknowledged that a clawback may occur in the future.</p><p class="MsoNormal">The controversy
surrounding the payouts occurred because the United States believes Bittrex
wanted to take a 'shortcut' and settle the matter as quickly as possible. In
this way, it was allegedly trying to avoid financial consequences sought by
local regulatory bodies.</p><p>The Downfall of Bittrex in
the US</p><p class="MsoNormal">Bittrex's
problems began towards the end of 2022 when the United States began to increase
regulatory pressure on companies associated with the cryptocurrency industry.
This led the exchange to decide <a href="https://www.financemagnates.com/cryptocurrency/bittrex-exists-us-market-amid-regulatory-woes/" target="_blank" rel="follow">to leave the country in April 2023</a>. The Co-Founder
and CEO, Richie Lai, wrote that: "Operating in the US is no longer
feasible."</p><p class="MsoNormal">After the
company decided to leave, <a href="https://www.financemagnates.com/cryptocurrency/bittrex-goes-bankrupt-with-us-treasury-its-largest-creditor/" target="_blank" rel="follow">declaring bankruptcy</a> a few days later seemed like the
natural next step, according to Bittrex. The bankruptcy application concerned
only the American branch, while Bittrex Global continues to operate normally.</p><blockquote class="twitter-tweet"><p lang="zxx" dir="ltr"><a href="https://t.co/zqh5JHeBXb">pic.twitter.com/zqh5JHeBXb</a></p>— Bittrex (@BittrexExchange) <a href="https://twitter.com/BittrexExchange/status/1648031603099312128?ref_src=twsrc%5Etfw">April 17, 2023</a></blockquote><p class="MsoNormal">Bittrex
estimated that due to the bankruptcy in the US, over 100,000 creditors may be
seeking their funds, and liabilities range from $500 million to $1 billion. The
exchange had $250 million in customer deposits in crypto and $50 million in
cash.</p><p class="MsoNormal">Refunds
could have started sooner if not for <a href="https://www.financemagnates.com/cryptocurrency/us-opposes-crypto-exchange-bittrexs-customer-repayment-plan/" target="_blank" rel="follow">opposition from the United States</a>. The US
claimed that before Bittrex returns funds to customers, <a href="https://www.financemagnates.com/cryptocurrency/sec-sues-crypto-exchange-bittrex-ceo-for-operating-without-registration/" target="_blank" rel="follow">it must first pay out millions for sanctions violations</a>. Among other things, the exchange is accused
of operating an unregistered securities platform.</p><p>The United States Tightens
Regulatory Loop</p><p class="MsoNormal">Bittrex is
just one example of the United States cracking down on the activities of
cryptocurrency entities. According to current legislative interpretation, a
large portion of them should operate as licensed securities providers.</p><p class="MsoNormal">In
February, Kraken's <a href="https://www.financemagnates.com/terms/c/cryptocurrency-exchange/" class="terms__secondary-term" id="601e2e5f-0c28-4253-9ad4-5e6b251ba2fa">cryptocurrency exchange</a> closed its staking service in the
United States <a href="https://www.financemagnates.com/cryptocurrency/kraken-shuts-staking-as-a-service-in-us-amid-30m-sec-settlement/" target="_blank" rel="follow">after settling with the SEC for $30 million</a>. The reason was a
lack of proper authorization to offer these types of products.</p><p class="MsoNormal">The
regulators' actions intensified this month, and the US focused on the two
largest exchanges. A lawsuit against Binance was filed over a week ago for
running an illegal exchange, while one against Coinbase was filed a day later.</p><p class="MsoNormal">The charges
against Binance and its CEO, Changpeng Zhao, <a href="https://www.financemagnates.com/cryptocurrency/when-a-us-regulator-declares-warn-on-crypto-a-week-in-review/" target="_blank" rel="follow">are severe</a>. Although Binance's
American operations were independent on paper, the lawsuit included statements
from management admitting that Zhao and Binance ultimately controlled the
executive decisions in Binance.US.</p><p class="MsoNormal">Coinbase, also
facing an SEC lawsuit, is a public company. Its shares have suffered
significantly since the SEC sued the company. In recent trading sessions, the
Nasdaq-listed entity (Nasdaq: COIN) lost over 15% of its value. Last week, it
tested its lowest levels since January.</p>
This article was written by Damian Chmiel at www.financemagnates.com.
https://www.financemagnates.com//cryptoc...bjections/
<p class="MsoNormal">The
American branch of the Bittrex crypto exchange, which declared <a href="https://www.financemagnates.com/terms/b/bankruptcy/" class="terms__main-term" id="41b3ef0d-d805-441d-8443-121890264e94">bankruptcy</a> over
a month ago, is prepared to pay out funds to its customers. The process is set
to begin tomorrow (Thursday), driven by a decision from the Delaware bankruptcy
court. </p><p>Bittrex Customers to
Regain Their Funds</p><p class="MsoNormal">In
yesterday's (Tuesday) verdict, Judge Brendan Shannon authorized Bittrex US to
pay customers who do not have any additional legal claims against the platform.
</p><p class="MsoNormal">However,
the latest decision does not clarify who is the legal owner of the cash and
cryptocurrencies frozen in the accounts of the American branch of the exchange.
In addition, it does not explain whether the claims of end customers are more important
than the claims of the US government against the exchange. The judge also
acknowledged that a clawback may occur in the future.</p><p class="MsoNormal">The controversy
surrounding the payouts occurred because the United States believes Bittrex
wanted to take a 'shortcut' and settle the matter as quickly as possible. In
this way, it was allegedly trying to avoid financial consequences sought by
local regulatory bodies.</p><p>The Downfall of Bittrex in
the US</p><p class="MsoNormal">Bittrex's
problems began towards the end of 2022 when the United States began to increase
regulatory pressure on companies associated with the cryptocurrency industry.
This led the exchange to decide <a href="https://www.financemagnates.com/cryptocurrency/bittrex-exists-us-market-amid-regulatory-woes/" target="_blank" rel="follow">to leave the country in April 2023</a>. The Co-Founder
and CEO, Richie Lai, wrote that: "Operating in the US is no longer
feasible."</p><p class="MsoNormal">After the
company decided to leave, <a href="https://www.financemagnates.com/cryptocurrency/bittrex-goes-bankrupt-with-us-treasury-its-largest-creditor/" target="_blank" rel="follow">declaring bankruptcy</a> a few days later seemed like the
natural next step, according to Bittrex. The bankruptcy application concerned
only the American branch, while Bittrex Global continues to operate normally.</p><blockquote class="twitter-tweet"><p lang="zxx" dir="ltr"><a href="https://t.co/zqh5JHeBXb">pic.twitter.com/zqh5JHeBXb</a></p>— Bittrex (@BittrexExchange) <a href="https://twitter.com/BittrexExchange/status/1648031603099312128?ref_src=twsrc%5Etfw">April 17, 2023</a></blockquote><p class="MsoNormal">Bittrex
estimated that due to the bankruptcy in the US, over 100,000 creditors may be
seeking their funds, and liabilities range from $500 million to $1 billion. The
exchange had $250 million in customer deposits in crypto and $50 million in
cash.</p><p class="MsoNormal">Refunds
could have started sooner if not for <a href="https://www.financemagnates.com/cryptocurrency/us-opposes-crypto-exchange-bittrexs-customer-repayment-plan/" target="_blank" rel="follow">opposition from the United States</a>. The US
claimed that before Bittrex returns funds to customers, <a href="https://www.financemagnates.com/cryptocurrency/sec-sues-crypto-exchange-bittrex-ceo-for-operating-without-registration/" target="_blank" rel="follow">it must first pay out millions for sanctions violations</a>. Among other things, the exchange is accused
of operating an unregistered securities platform.</p><p>The United States Tightens
Regulatory Loop</p><p class="MsoNormal">Bittrex is
just one example of the United States cracking down on the activities of
cryptocurrency entities. According to current legislative interpretation, a
large portion of them should operate as licensed securities providers.</p><p class="MsoNormal">In
February, Kraken's <a href="https://www.financemagnates.com/terms/c/cryptocurrency-exchange/" class="terms__secondary-term" id="601e2e5f-0c28-4253-9ad4-5e6b251ba2fa">cryptocurrency exchange</a> closed its staking service in the
United States <a href="https://www.financemagnates.com/cryptocurrency/kraken-shuts-staking-as-a-service-in-us-amid-30m-sec-settlement/" target="_blank" rel="follow">after settling with the SEC for $30 million</a>. The reason was a
lack of proper authorization to offer these types of products.</p><p class="MsoNormal">The
regulators' actions intensified this month, and the US focused on the two
largest exchanges. A lawsuit against Binance was filed over a week ago for
running an illegal exchange, while one against Coinbase was filed a day later.</p><p class="MsoNormal">The charges
against Binance and its CEO, Changpeng Zhao, <a href="https://www.financemagnates.com/cryptocurrency/when-a-us-regulator-declares-warn-on-crypto-a-week-in-review/" target="_blank" rel="follow">are severe</a>. Although Binance's
American operations were independent on paper, the lawsuit included statements
from management admitting that Zhao and Binance ultimately controlled the
executive decisions in Binance.US.</p><p class="MsoNormal">Coinbase, also
facing an SEC lawsuit, is a public company. Its shares have suffered
significantly since the SEC sued the company. In recent trading sessions, the
Nasdaq-listed entity (Nasdaq: COIN) lost over 15% of its value. Last week, it
tested its lowest levels since January.</p>
This article was written by Damian Chmiel at www.financemagnates.com.
https://www.financemagnates.com//cryptoc...bjections/