Court Allows Bittrex to Withdraw Funds for US Customers

On June 15, the U.S. arm of the bitcoin exchange Bittrex will open withdrawals for clients after a favorable court ruling in Delaware bankruptcy proceedings. This was reported by CoinDesk.

In April Bittrex announced the winding down of operations in the United States, citing regulatory uncertainty. Subsequently the U.S. Securities and Exchange Commission (SEC) brought a lawsuit against the company for violations of the law.

On May 8 the exchange filed for bankruptcy in the United States. According to the lawsuit, the company’s assets and liabilities amount to between $500 million and $1 billion. The number of creditors exceeds 100,000. The platform stated that it holds assets of U.S. customers who did not withdraw them by April 30.

Following the bankruptcy filing, Bittrex petitioned the court to permit users to withdraw funds without costs and expenses tied to restructuring.

However the motion was met with resistance from government representatives, who cited the company’s outstanding debt to the FinCEN in the amount of $5 million. This is part of a sum of about $30 million that Bittrex agreed to pay as part of a settlement of allegations of violating the U.S. sanctions regime.

Hearings were held on June 13. Judge Brendan Shannon, in the order, authorized Bittrex US and affiliated entities to ‘allow clients with indisputable, unconditional, and monetarily valued claims to withdraw crypto and fiat assets’.

The court order did not specify which users have the right to demand reimbursement from Bittrex. The order also did not determine whether debt repayments to authorities take priority over other claims.

A partner at the law firm Quinn Emanuel, Patricia Tomasko, confirmed to the publication that ‘the platform will open withdrawals on Thursday, June 15’.

Earlier on June 13, the federal court for the District of Columbia ordered the SEC and Binance.US to reach a compromise in safeguarding client assets with the platform able to continue operating normally.

The ruling followed the regulator’s relevant motion in the context of a lawsuit against Binance and its CEO Changpeng Zhao.