• Bittrex Inc. received permission from a US court to borrow $7 million worth of Bitcoin (BTC) to fund their Chapter 11 bankruptcy case.
• The exchange is planning to use the loan to return customer funds, and then shut down its American businesses.
• This filing comes after Bittrix left the U.S. due to regulatory challenges, and was given a Wells Notice from the Securities and Exchange Commission (SEC) for alleged violations of investor protection laws and unregistered securities exchange operations.
Bittrex’s Bitcoin Loan
A US court has granted troubled cryptocurrency exchange Bittrex Inc permission to borrow $7 million worth of bitcoin (BTC) in order to start their Chapter 11 bankruptcy proceedings. Bankruptcy Judge Brendan Shannon approved this request on an interim basis at a Wednesday court hearing in Wilmington, Delaware.
Reason Behind Filing for Bankruptcy
Bittrix filed for bankruptcy protection on Monday in order to return customer funds and shut down its American businesses, while its offshore entity based in Liechtenstein was excluded from the filing. The filing came after Bittrix had announced their leaving of the U.S due to regulatory challenges, and receiving a Wells Notice from the Securities and Exchange Commission (SEC). This notice was due to alleged violations of investor protection laws as well as operating an unregistered securities exchange.
Closing Of US Operations
Prior to going bankrupt, Bittrix stopped accepting new deposits from U.S customers and asked existing users to withdraw their crypto assets instead. According to court filings made on March 27th, the exchanges US customer base consisted of only a minor portion compared with its non-U.S customers at that time; making up around 10% or so with most being non-US customers instead..
Potential Affects On Customers & Partners
The loan will enable them return customer funds as well as shutting down its American business operations which could potentially affect both customers as well as partners alike who have been working alongside them since they began operations back in 2014; when they first launched their digital asset marketplace providing individuals with access into this new digital asset economy..
Conclusion
It remains unclear what will happen next but it is clear that this decision by the court could be beneficial for both parties involved if done correctly; allowing them proceed forward with their plans without any major issues or delays along the way..