Earlier this year, the Seattle-based crypto exchange Bittrex announced its intent to wind down all its operations in the United States following heightened regulatory scrutiny by the SEC.
After filing for Chapter 11 bankruptcy protection in a US Delaware federal court earlier, Seattle-based cryptocurrency exchange Bittrex Inc has been granted permission to allow its customers who meet the necessary regulatory requirements to access their accounts and withdraw their remaining digital assets. According to the announcement, Bittrex customers who have completed the Know Your Customer (KYC) verification processes and accepted the latest Terms of Service can access their accounts to request withdrawals.
Beginning June 15 until August 31, the company announced eligible customers will be able to process their withdrawals. Meanwhile, Bittrex users in the United States with no balance can access their accounts but no other features will be available to them.
“We are happy that the court will allow us to let customers access their accounts and withdraw any remaining assets, and we hope that our customers will take advantage of this opportunity. Our goal has always been to make all of our customers whole during this process,” Bittrex general counsel David Maria noted.
Notably, the company has set the minimum withdrawable amount at $25 and users will have to submit a proof of claim with the court to access the remaining balances. For those intending to collect cash balances for a deceased person, Bittrex noted that they will have to provide supporting documents to show they are the beneficiary alongside proof of claim.
Bittrex Falls Understand the SEC Claws
Since the implosion of FTX and Alameda Research late last year, the United States Securities and Exchange Commission (SEC) has intensified its crackdown on crypto firms. Furthermore, SEC Chair Gary Gensler holds the notion that almost all crypto assets are unregistered securities. Mid-April this year, the SEC charged Bittrex and former CEO William Shihara for operating an unregistered securities exchange, broker, and clearing agency.
Today we charged crypto asset trading platform Bittrex Inc. and its co-founder and former CEO William Shihara for operating an unregistered national securities exchange, broker, and clearing agency.https://t.co/kBsIFMp7ZA
— U.S. Securities and Exchange Commission (@SECGov) April 17, 2023
The SEC argued that Bittrex has accrued more than $1.3 billion in revenue since 2017 from investors in the United States. Bittrex, which has been in operation since 2014, was accused of prioritizing its profits over customers’ protection through the listing of unregistered securities.
In its defense, Bittrex insisted that the SEC is regulating the crypto industry through enforcement, thus pushing investors overseas.
“Bittrex operated within the parameters of the law at all times, and we look forward to vindicating our position in court,” the company noted.
Meanwhile, several cryptocurrency exchanges including Coinbase Global Inc (NASDAQ: COIN) and Binance have been charged by the United States SEC for listing unregistered securities including Cardano (ADA), Polygon (MATIC), BNB, and Solana (SOL), among many others.