Bittrex US has filed for bankruptcy in a federal court in Delaware less than a month after the US Securities and Exchange Commission accused the crypto platform of running an unregistered securities exchange.
On Monday, the US arm of cryptocurrency exchange Bittrex Global filed for Chapter 11 bankruptcy, the company announced in an official press release.
The exchange noted that the bankruptcy filing would not impact Bittrex Global, which serves customers outside the United States. The exchange will continue operations “as normal” for customers outside the US.
In early April, Bittrex announced that it is shutting down US operations due to an uncertain regulatory environment and asked customers to withdraw their assets.
“It’s just not economically viable for us to continue to operate in the current U.S. regulatory and economic environment,” Bittrex co-founder Richie Lai said at the time.
Shortly after, the SEC charged Bittrex, its co-founder and former CEO William Shihara, and its foreign affiliate Bittrex Global for operating an unregistered national securities exchange, broker, and clearing agency.
The agency claimed that Bittrex has facilitated the buying and selling of crypto assets since at least 2014, earning at least $1.3 billion in revenues from transaction fees.
Specifically, the commission alleged that Bittrex listing of tokens OMG, Dash, ALGO, Monolith (TKN), Naga (NGC), and IHT Real Estate Protocol (IHT) constituted unregistered securities offerings.
Bittrex disputed the allegations in a statement at the time.
Nevertheless, users who did not withdraw their crypto assets from the exchange by the end of April will now need to wait for the Bankruptcy Court to decide the method by which those funds can be claimed.
“For those customers who did not withdraw their funds from the platform prior to the end of April, your funds remain safe and secure, and our main priority is to ensure that our customers are made whole.”
Is Binance.US Next to Face Legal Scrutiny?
Some market participants have expressed concern that Binance.US, the US arm of crypto exchange Binance, might be facing legal action in the country.
For one, crypto veteran Adam Cochran have suggested that the widening discrepancy between the price of cryptocurrencies on Binance.US compared to global counterparts is an indication that the platform’s market makers are getting out.
“My hunch is Binance getting forced out of US market in CFTC settlement and continuing the rotation from BUSD->BTC->USDT that I said was driving up the market to reallocate funds cross entity,” he said in a recent tweet.
For perspective, the BTC/USD pair listed on Binance.US currently trades at a nearly $650 premium to its Coinbase-listed counterpart and to Binance’s bitcoin-tether pair (BTC/USDT).
Pseudonymous Twitter analyst @fewseethis also claimed that the premium on Binance.US likely results from market makers leaving the exchange in anticipation of regulatory action.
“IF there is some sort of gov action against Binance.US incoming AND market makers who usually do business there know about it, THEN it’s possible they left and there isn’t enough liquidity & possibilities for arbitraging are diminished.”
This article was originally published by CryptoNews.