• Bittrex Inc. has been granted permission to borrow $7 million worth of Bitcoin (BTC) from a US court in order to fund its Chapter 11 bankruptcy case.
• The troubled cryptocurrency exchange filed for bankruptcy protection on Monday, intending to return customer funds and shut down its American businesses.
• This comes after the firm received a Wells Notice from the Securities and Exchange Commission (SEC) over alleged violations of investor protection laws and the operation of an unregistered securities exchange.
Bittrex Files for Bankruptcy Protection
Troubled cryptocurrency exchange Bittrex Inc. has filed for bankruptcy protection with the intention to return customer funds and shut down its American businesses.
Court Approves Bittrex’s Request for $7M Bitcoin Loan
A U.S. court has given Bittrex permission to borrow $7 million worth of bitcoin (BTC) to fund its Chapter 11 bankruptcy case on an interim basis at a Wednesday court hearing in Wilmington, Delaware.
Reason Behind Bankruptcy Filing
The filing came a few weeks after the firm received a Wells Notice from the Securities and Exchange Commission (SEC) over alleged violations of investor protection laws and the operation of an unregistered securities exchange. Following this, Bittrex stopped accepting new deposits from U.S customers and asked existing users to withdraw their crypto assets by March 27th.
Purpose of Bitcoin Loan
According to Bittrex’s lawyer, the borrowed BTC will enable them to return customers’ assets which were initially frozen due to regulatory challenges faced by the company in March due when it announced that it was leaving the US market..
Conclusion
Court approval for this loan signifies that proceedings are on track for Bittrex’s Chapter 11 bankruptcy case
