Bittrex Granted Permission to Honor Withdrawals Post-Bankruptcy
Bittrex customers can breathe a little easier on June 15 after given the authorization to withdraw funds from their Bittrex account.
Key Takeaways
- Bittrex customers will be able to withdraw fiat and crypto from their accounts starting June 15.
- The motion does not extend to securities debates, settling dispute between debtors and customers or any preceding ownership disputes.
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United States District Court for the District of Delaware has authorized customers of Bittrex, a now-defunct cryptocurrency exchange, to withdraw cryptocurrency assets and fiat currency starting on June 15.
Bittrex filed for Chapter 11 bankruptcy on May 8 following a lawsuit with the SEC, which claimed that the bankrupt platform was operating as an unregistered securities exchange while being held back from restoring clients’ access to their assets. Opposition from the U.S. Justice Department cited the exchange’s unpaid penalties worth millions of dollars for violating sanctions.
The court’s decision came after careful consideration of the motion set forth by the debtors and following a hearing to further investigate the merits of the relief requested, stating that:
“a hearing having been held to consider the relief requested in the Motion and upon the record of the hearing and all of the proceedings had before this Court […] establish just cause for the relief granted.”
While the court order offers some relief to the debtors, it places clear limitations on what it signifies. “Nothing in the Motion, this Order, or announced at the hearing constitutes a finding under the federal securities laws as to whether crypto assets or transactions involving crypto assets are securities.”
It also does not address any disputes related to ownership or priority among Bittrex, its customers, or other creditors, including the U.S. government.
The ruling further states that if a customer receives more money, either in cryptocurrency or fiat, than they’re supposed to under the repayment plan, and if all the creditors have not been paid back in full, then the U.S. government or any other creditor can take back the extra money from that customer.
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