• Bittrex has filed for bankruptcy in the United States and plans to cover legal fees with Bitcoin loans.
• The court granted Bittrex permission to take a loan of 250 BTC, worth approximately $6.86 million at current rates.
• The crypto exchange attributed their decision to file for bankruptcy to “an untenable regulatory and economic environment” in the US.
Bittrex Files for Bankruptcy
Bittrex has recently kicked off bankruptcy proceedings after laying off over 80 employees in February and receiving a lawsuit from the Securities and Exchange Commission (SEC).
Bitcoin Loan to Fund Legal Fees
To cover the start of legal proceedings and a hearing in June, Bittrex plans to receive 700 Bitcoin (BTC) from its parent company Aquila Holdings, worth about $19.2 million at the time of writing. The firm is expected to receive two tranches of 250 BTC and 450 BTC respectively, with U.S. Bankruptcy Judge Brendan Shannon granting permission for the first loan of 250 BTC worth approximately $6.86 million at current rates due to Bitcoin’s low interest rate and volatility protections. Bittrex reportedly plans to repay the loan in Bitcoin as well.
Sympathy & Questions After Filing
Many have sympathized with Bittrex following their Chapter 11 filing while some questioned their decision on funding legal costs through bitcoin loans rather than other sources such as customer deposits which are still intact according to the exchange. This raises questions regarding U.S crypto regulations and its role in this situation unfolding before us today.
Untenable Regulatory & Economic Environment
Bittrex attributed their decision to file for bankruptcy due U.S’s lack of regulatory clarity leading “a substantial negative economic impact on the digital asset industry” resulting in overlapping regulatory burdens that were difficult even for established exchanges like Bittrex itself who had been around since 2014 but eventually succumbed under such conditions despite shutting down business operations at April’s end..
Overall, it is clear that external forces have played a significant role in shaping Bittrex’s present situation – both positive and negative effects being felt by customers alike while they await news on how this story will unfold further down its course