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- Cryptocurrency exchange Bittrex has filed for Chapter 11 bankruptcy protection in Delaware.
- The U.S. Treasury’s OFAC is listed as the largest creditor of the bankrupt exchange.
- The bankruptcy filing comes less than a month after the SEC sued the cryptocurrency exchange.
Bittrex Inc. has filed for Chapter 11 bankruptcy protection in Delaware. The Seattle-based cryptocurrency exchange filed for bankruptcy less than a month after being sued by the U.S. Securities and Exchange Commission (SEC). The exchange announced last month that it was winding down operations in the United States in light of the deteriorating regulatory environment.
Bittrex Owes $25 Million to OFAC
according to a report Bloomberg, Bittrex lists assets and liabilities of up to $1 billion each under Chapter 11 of the U.S. Bankruptcy Code. Entities affiliated with the cryptocurrency exchange, including Desolation Holdings LLC, Bittrex Malta Holdings Ltd. and Bittrex Malta Ltd., also filed for bankruptcy, according to court documents reviewed by Bloomberg.
Ironically, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) is listed as the largest non-insider creditor of the bankrupt exchange. Bittrex owes OFAC up to $25 million as part of a settlement the two parties reached last October. OFAC fined cryptocurrency exchanges millions of dollars for alleged violations of multiple sanctions programs as well as the Anti-Money Laundering (AML) and Suspicious Activity Reporting (SAR) reporting requirements of the Bank Secrecy Act (BSA). At the time, the enforcement action against the exchange was the largest ever undertaken by OFAC.
Less than a month after Bittrex filed for bankruptcy prosecute Charged with violation of federal law by the SEC. Securities regulators accused the exchange and its former chief executive, Bill Shihara, of running an unregistered national securities exchange, broker and clearinghouse. The regulator also accused its foreign subsidiary of failing to register as a national securities exchange because it operates a single shared order book with the U.S. entity.
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