Bankrupt Crypto Exchange Bittrex U.S. to Enable Withdrawals from Thursday Onwards

In a significant development, the U.S. arm of cryptocurrency exchange Bittrex has been granted permission by a Delaware bankruptcy court to facilitate customer withdrawals.

The ruling, which was handed down on Tuesday, June 13, 2023, marks a step forward in the ongoing legal battle between Bittrex and the U.S. government.

Bittrex filed for bankruptcy in May 2023, citing financial difficulties. The company’s intention to close its U.S. operations had led to a surge in customer withdrawals in March.

Seeking to provide accessibility to customer funds, Bittrex requested the court’s approval for customers to regain control over their assets.

The U.S. government opposed Bittrex’s bid, citing outstanding sanctions violations that the exchange allegedly owed millions of dollars. This opposition complicated the legal battle and raised uncertainties about the fate of customer holdings.

In his ruling, Delaware bankruptcy court Judge Brendan Shannon granted Bittrex U.S. and its affiliates permission to facilitate customer withdrawals.

However, the ruling does not determine ownership of the assets or establish whether customer claims take precedence over those of the government. Moreover, it warns of potential clawbacks in the future, which introduces further complexities.

Bittrex U.S. customers will be able to resume withdrawals on Thursday, June 15. However, the extent to which customers will be able to withdraw their assets remains unclear.

The issue of asset ownership remains unresolved, and the potential for clawbacks introduces a level of uncertainty. Customers should closely monitor the situation as further developments unfold, and exercise caution when managing their crypto holdings.