At the court hearing this week in Wilmington, Delaware, Bittrex’s lawyers argued that the Bitcoin loan could help to smooth down the bankruptcy process for customers and the company, despite Bittrex having enough funds to return to customers. The court judge, Brendan Shannon, approved the initiative to temporarily borrow 250 Bitcoin (BTC), around 6.8 million USD, from the parent company, Aquila Holdings.
Bittrex Seattle headquarters are also hoping to attain an additional loan of 450 BTC, around 12.2 million USD.
Bittrex stopped all US operations at the end of April and filed for bankruptcy only on 8 May. Days after US transactions were put to a halt, SEC sent a Wells notice to Bittrex US and Bittrex Global and filed a lawsuit against Bittrex US for the operation of an unregistered securities exchange. Bittrex Global was outside of the SEC jurisdiction because it is incorporated in Liechtenstein.
Under the current law, six of the tokens listed on Bittrex fall under the definition of securities, such as Algorand (ALGO) and DASH. SEC used the following as an allegation against Bittrex.
Oliver Linch, CEO of Bittrex Global spoke with Blockworks about the decision to shut down Bittrex US, there he told:
“We only believe in doing the right thing and we, literally, can’t because we don’t know what that means.”
He thinks that neither Bittrex US nor Bittrex Global got given an opportunity to somehow reply to the SEC’s Wells notice, despite Bittrex’s lawyers being in contact with SEC ever since it.