Seattle-based Bittrex Inc, which operates one of the major US cryptocurrency exchanges, filed for Chapter 11 bankruptcy protection in Delaware on Monday.
Bittrex was founded in 2014 and has become one of the leading platforms for trading digital assets such as Bitcoin, Ethereum, and Litecoin.
However, Bittrex has also faced several legal and regulatory challenges in recent years. In 2019, the New York State Department of Financial Services rejected Bittrex’s application for BitLicense, a required license to operate a cryptocurrency business in the state.
In 2020, Bittrex was sued by a group of investors alleging that the company was selling them unregistered securities in the form of digital tokens.
In 2021, it was among the targets of a massive cyberattack that compromised several cryptocurrency exchanges and resulted in the theft of millions of dollars’ worth of digital assets.
What is Chapter 11 Bankruptcy?
A Chapter 11 bankruptcy is a form of bankruptcy that involves the reorganization of a debtor’s business, debts, and assets. It allows a company to continue operations and restructure its obligations with the approval of the court and creditors.
Depending on the terms of the restructuring plan, the exchange may continue to operate as normal, suspend some or all of its services, liquidate some or all of its assets, or merge with another entity.
*Not investment advice.
