The US and Maltese branches of crypto exchange Bittrex have processed $425 million in withdrawals as the platform announced plans to shut down US operations.
On Wednesday, Bittrex lawyer Sushil Kriplani reportedly Said A Delaware bankruptcy court said the firm was not involved in any of the negative behavior that has been alleged against other entities in the crypto space.
“Bittrex does not pledge, or loan, or put at risk any of its customer deposits,” Kriplani said.
“As a result, it also has difficulty generating revenue, especially if the regulatory environment that restricts it or calls into question its ability to allow trading.”
Kriplani also emphasized that the exchange is committed to making every effort to reach out to customers who may be in the dark, noting that a large chunk of assets have gone unclaimed.
Bittrex’s US branch holds $50 million in customer cash and $250 million in customer crypto, while its Maltese entity, which has also filed for bankruptcy, holds $120 million in customer cash and crypto.
The company and its affiliates have a total of 1.5 million active users, of which 600,000 are in the US.
Bittrex’s assets under management peaked at $2.7 billion in 2018, before falling to around $566 million by 2023, a decline of nearly 80%.
The decline may reflect the broader challenges facing the company, which is battling regulatory headwinds and market volatility.
Last year, the exchange was Fined $53 million by the Treasury’s Office of Foreign Assets Control and the Financial Crimes Enforcement Network for failing to prevent customers in Iran, Cuba and other sanctioned countries from using its platform.
The exchange has also been under regulatory scrutiny in New York, where regulators ordered the platform to cease operations in the state, citing concerns over its ability to detect money laundering and comply with sanctions.
Yet, despite its struggles, Bittrex has had a relatively clean record, avoiding any scandals that plague its peers.
Bittrex US Files for Bankruptcy After SEC Lawsuit
Earlier this week, Bittrex U.S. filed for bankruptcy in a federal court in Delaware.
The move comes less than a month after the US Securities and Exchange Commission accused the crypto platform of running an unregistered securities exchange.
The exchange noted that the bankruptcy filing will not affect Bittrex Global, which serves customers outside the United States. The exchange will continue to operate “as usual” for customers outside the US.
In early April, Bittrex announced Due to the uncertain regulatory environment, it is shutting down US operations and asking customers to withdraw their assets.
“It is not financially viable for us to continue operating in the current US regulatory and economic environment,” Richie Lai, co-founder of Bittrex, said at the time.