Court Grants Bittrex Clients Withdrawal Access From June 15
In a recent development, the clients of the collapsed United States unit of the Bittrex exchange would have access to their frozen funds from June 15. A Delaware bankruptcy court ruling reportedly issued the withdrawal order.
According to the report, the Bittrex local branch filed for Chapter 11 bankruptcy in May 2023. Afterward, it petitioned the ruling court to grant its effort to allow customers access to their funds. But its effort was met with stern opposition from the US Justice Department.
The opposition was based on millions in unpaid liabilities for sanctions infringements. However, Under the order issued by Judge Brendan Shannon in response to a motion filed by Bittrex’s debtors in possession, the troubled exchange can now facilitate customer withdrawals.
Nonetheless, this permission only extends to customers with “undisputed, noncontingent, and liquidated claims,” enabling them to withdraw both cryptocurrency assets and fiat currency from the platform per their claims.
Court Clarified The Extent Of The Approval
While the court order authorizes Bittrex to take the necessary actions to implement the granted relief, it does not resolve any ownership or priority disputes between the exchange, its customers, or other investors, including the US government.
Moreover, it holds no precedence on other bankruptcy cases related to cryptocurrency assets or transactions within America. Significantly, the court order emphasizes that it must not be construed as a determination under federal securities laws regarding categorizing cryptocurrency assets or transactions involving them as securities.
This clarification is of utmost importance since securities laws regulate the issuance, sale, and trading of securities within the United States. If crypto assets were to be considered securities, they would be subject to applicable laws and regulations, which could potentially have implications for the insolvent cryptocurrency exchange and its clients.
By emphasizing that the order does not make any determination on the legal status of cryptocurrency assets under federal securities laws, the court essentially indicates that it is not deciding whether crypto assets or related transactions are securities or not.
SEC Filed Lawsuit Against Bittrex
In a separate matter, on April 17th, the US SEC (Securities and Exchange Commission) filed charges against Bittrex and its former CEO, William Shihara, for operating an unregistered national securities exchange, broker, and clearing agency.
The SEC also implicated Bittrex Global GmbH, a foreign platform affiliate, for failing to register as a national securities exchange in connection with operating a single shared order book alongside Bittrex.
As per the SEC’s allegations, Bittrex is accused of representing itself as a platform that enables the purchase and sale of crypto assets, which, according to the SEC, have been marketed and traded as securities since 2014.
It is claimed that from 2017 to 2022, Bittrex reportedly earned revenue of at least $1.3 billion, primarily through transaction fees imposed on investors, including those based in the United States. However, Bittrex allegedly provided brokerage, exchange, and clearing services without registering these operations with the Commission.
In a recent development, the clients of the collapsed United States unit of the Bittrex exchange would have access to their frozen funds from June 15. A Delaware bankruptcy court ruling reportedly issued the withdrawal order.
According to the report, the Bittrex local branch filed for Chapter 11 bankruptcy in May 2023. Afterward, it petitioned the ruling court to grant its effort to allow customers access to their funds. But its effort was met with stern opposition from the US Justice Department.
The opposition was based on millions in unpaid liabilities for sanctions infringements. However, Under the order issued by Judge Brendan Shannon in response to a motion filed by Bittrex’s debtors in possession, the troubled exchange can now facilitate customer withdrawals.
Nonetheless, this permission only extends to customers with “undisputed, noncontingent, and liquidated claims,” enabling them to withdraw both cryptocurrency assets and fiat currency from the platform per their claims.
Court Clarified The Extent Of The Approval
While the court order authorizes Bittrex to take the necessary actions to implement the granted relief, it does not resolve any ownership or priority disputes between the exchange, its customers, or other investors, including the US government.
Moreover, it holds no precedence on other bankruptcy cases related to cryptocurrency assets or transactions within America. Significantly, the court order emphasizes that it must not be construed as a determination under federal securities laws regarding categorizing cryptocurrency assets or transactions involving them as securities.
This clarification is of utmost importance since securities laws regulate the issuance, sale, and trading of securities within the United States. If crypto assets were to be considered securities, they would be subject to applicable laws and regulations, which could potentially have implications for the insolvent cryptocurrency exchange and its clients.
By emphasizing that the order does not make any determination on the legal status of cryptocurrency assets under federal securities laws, the court essentially indicates that it is not deciding whether crypto assets or related transactions are securities or not.
SEC Filed Lawsuit Against Bittrex
In a separate matter, on April 17th, the US SEC (Securities and Exchange Commission) filed charges against Bittrex and its former CEO, William Shihara, for operating an unregistered national securities exchange, broker, and clearing agency.
The SEC also implicated Bittrex Global GmbH, a foreign platform affiliate, for failing to register as a national securities exchange in connection with operating a single shared order book alongside Bittrex.
As per the SEC’s allegations, Bittrex is accused of representing itself as a platform that enables the purchase and sale of crypto assets, which, according to the SEC, have been marketed and traded as securities since 2014.
It is claimed that from 2017 to 2022, Bittrex reportedly earned revenue of at least $1.3 billion, primarily through transaction fees imposed on investors, including those based in the United States. However, Bittrex allegedly provided brokerage, exchange, and clearing services without registering these operations with the Commission.
