Bittrex Files for Bankruptcy, Now Funding with Bitcoin Loans

• Bittrex has recently filed for bankruptcy in the US and plans to pay for legal fees with two tranches of a Bitcoin loan.
• The loan is worth approximately $19.2 million and was approved by U.S Bankruptcy Judge Brendan Shannon due to Bitcoin’s low-interest rates and volatility protections.
• Bittrex cited difficult regulatory and economic conditions as the reason for filing, citing a lack of clarity in the US crypto regulations which has had a substantial negative impact on the digital asset industry.

Bittrex Files for Bankruptcy

Bittrex, one of the largest cryptocurrency exchanges, has kicked off bankruptcy proceedings after laying off over 80 employees in February. The firm filed for bankruptcy in federal court in Delaware on Monday, May 8th.

Bitcoin Loans to Fund Legal Fees

Bittrex plans to use two tranches of a Bitcoin loan from its parent company Aquila Holdings to pay legal fees associated with bankruptcy proceedings. The loan is worth approximately $19.2 million at current rates and consists of two tranches: 250 BTC (worth around $6.86 million) and 450 BTC (worth around $12.3 million). U.S Bankruptcy Judge Brendan Shannon granted Bittrex permission to take out the first loan due to Bitcoin’s low interest rate and volatility protections. Repayment will be done in Bitcoin as well.

Impact on Customers

Bittrex reassured users that their deposits are secure and that withdrawals from customer accounts would be prioritized during bankruptcy proceedings.

Lack of Regulatory Clarity Cited

Bittrex noted that a lack of regulatory clarity within the US created an untenable environment which resulted in overlapping regulatory burdens on digital asset businesses as well as soaring costs associated with compliance measures – leading them to opt for bankruptcy protection instead despite their intentions to shut down their business at the end of April.


                                               Many have reacted sadly while questioning US crypto regulations‘ role in Bittrex’s collapse following its Chapter 11 filing decision – highlighting how important it is that there is clear guidance available when it comes to digital asset companies operating within America’s borders going forward so similar situations can be avoided in future cases.