Bittrex Approved 250 BTC Loan From Its Parent Company

Key Points:

• A US judge has approved Bittrex’s request to apply for a 250 BTC loan from parent company Aquila Holdings worth $7 million.
• The company will also apply for another loan at a hearing in June, seeking a 450 BTC loan.
• Bittrex says it has the ability to repay all customers with crypto, and this loan will help smooth the bankruptcy process.

Bankruptcy cryptocurrency exchange Bittrex received court permission on Wednesday to borrow $7 million in Bitcoin to fund the start of its Chapter 11 case.

US bankruptcy judge Brendan Shannon approved Bittrex’s request to apply for a 250 BTC loan from parent company Aquila Holdings, which is currently worth $7 million.

The bankrupt crypto exchange also said it would apply for another loan at a hearing in June, seeking a 450 BTC loan. That means the total value of the two loans could be as high as $19 million. If the Bitcoin price remains stable until next month, the loan will be worth $12.4 million.

While Bittrex says it has the ability to repay all customers in crypto, the loan will help smooth the bankruptcy process.

Prior to the news on May 9, Bittrex’s US subsidiary had filed for bankruptcy and said it planned to return customer funds and cease operations in the US. The company’s international affiliates will continue to operate cryptocurrency exchanges for customers outside of the United States.

Revealing the reason for filing for bankruptcy, the company said that the US regulatory environment had become untenable after the SEC sued the company for allegedly operating an unregistered stock exchange.

As mentioned earlier, the Securities and Exchange Commission (SEC) has charged the exchange with violating federal securities laws by operating a national stock exchange, broker, and agency clearing at the same time. Bill Shihara, former CEO and Bittrex Global GmbH, was also charged.

Increasingly, the United States Securities and Exchange Commission (SEC) is appearing to clean up the crypto industry. While some investors argue that more regulation will help legitimize the space, others fear that too much regulatory interference could reduce its decentralized appeal.

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