Court allows bankrupt crypto exchange Bittrex to resume customer withdrawals

The U.S. arm of Bittrex will reopen withdrawals on June 15 after securing court approval for its plan to repay customers ahead of credited fines.

A Delaware bankruptcy court ruled in favor of the company’s plan and rejected the Department of Justice’s (DOJ) motion to block it on June 14, according to court filings.

According to the court order, any customers that hold “undisputed, noncontingent, and liquidated claims” are allowed to withdraw their funds in the form of cryptocurrency or fiat from the platform.

The order also stipulates that the court’s decision does not have a “precedential effect” on any other bankruptcy cases adjudicated in the U.S.

Additionally, the order does not “determine or settle” the relative priority between the firm’s creditors — which includes U.S. regulatory agencies — and its customers when it comes to ownership of assets and their repayment.

This means there could be future clawbacks by creditors despite the withdrawals.

Fines

The DOJ filed a motion to block Bittrex’s repayment plan on June 7, arguing that the firm’s creditors, like the OFAC and FinCEN, would be negatively impacted by the withdrawals.

OFAC and FinCEN both fined the firm in October 2022 over violations of economic sanctions. The two regulators imposed fines of $24 million and $29 million, respectively, on the firm.

Bittrex agreed to pay $24 million to FinCen, but still owes the two regulators a collective $29 million in fines, making them two of its biggest creditors.

The DOJ said in the filing:

“Fairness and equity demand that if the OFAC and FinCEN Debts cannot be paid in full by confirmation, the United States should have a chance to prove that the cryptocurrency assets belong to the Debtors and can be clawed back from the customers.”

The post Court allows bankrupt crypto exchange Bittrex to resume customer withdrawals appeared first on CryptoSlate.

Credit: Source link