The US government filed an objection against the US subsidiary of the Bittrex exchange, over its plan to give priority to the give the funds back to the customers.
Bittrex is a global crypto trade platform & this exchange was providing crypto trade services to US citizens via a subsidiary. In the early of last month, the American subsidiary filed for bankruptcy in a US court, following the charges from the United States Securities Exchange Commission (SEC).
A few weeks ago, Bittrex requested the court to give regulatory approval for the exchange to release the payment for the Bittrex customers, as the bankrupt exchange is holding nearly all customer cash and crypto assets worth $50 million and $250 million each.
The US government filing noted that it is not a better idea to give priority to the customer’s repayment and suggested to go through a proper bankruptcy proceedings.
“Siloing creditors into subordinated classes outside of the confirmation hearing is improper,” the filing read.
Last year, Bittrex’s US subsidiary agreed to pay $53 million as a charge to the US Treasury, over allegedly allowing Iran, Cuban based users to engage in unauthorised transactions.
SEC vs Bittrex
In April of this year, the United States Securities regulatory body SEC sued the Bittrex exchange. The SEC complaint noted that Bitterx’s subsidiary provided unregistered securities offerings & also ran an illegal crypto exchange.
It was noticeable that the SEC body initiated a suit against Bittrex just before the departure of this crypto firm from the US.
Recently few crypto experts claimed that Coinbase & BinanceUS were priorities for the SEC to target under suits but they increased their efforts mainly against Bittrex so that they can catch Bittrex before it departs from the country.
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