Bittrex Exchange filed for bankruptcy in May following a lawsuit from the Securities and Exchange Commission. The exchange platform directed its consumers to withdraw their crypto reserves from their accounts before April.
However, Bittrex officials are in the process of unlocking the remaining consumer funds. To this end, the firm has faced some resistance from the law. After some struggle, the firm finally got a green light from the court to release the locked customer reserves.
However, the court approval currently faces opposition from the US Department of Justice. DOJ argues that the unlocking of Bittrex assets is still premature. Patricia Tomasco has told the media that the Bittrex exchange will enable a withdrawal feature for existing consumers on June 15th.
Judge Brendon Shannon who signed the court order has motioned that Bittrex is allowed to take the necessary action for the benefit of its affected consumers. Meanwhile, DOJ opposed the funds’ release request by Bittrex the week before. DOJ has stated that the exchange should prioritize catering to its creditors as part of its outstanding funds’ settlement plans.
As per the bankruptcy filing of Bittrex exchange, the biggest creditor of the firm is the Office of Foreign Assets Control under the US Treasury. As per a careful estimate, Bittrex owes more than $24 million to OFAC.
However, the current court ruling regarding funds release has not defined precedence for Bittrex creditors or consumers. The firm halted operations in the USA citing regulatory compliance issues and a lack of cooperation from the regulators to support disruptive technologies.
SEC charged Bittrex with violation of securities law last month and the firm filed for bankruptcy listing more than 100K creditors. It is interesting to note that Algorand and Dash are among the listed tokens on Bittrex that were alleged by SEC as unregistered securities.
It is worth noting that a previous remark of Gary Gensler is currently making rounds on social media regarding the Algorand, where he claimed that it was great technology and brilliant work. Bittrex CEO, Oliver Linch claimed that the industry aims to have clearly defined rules to regulate the crypto market rather than operating in a fog.
Billionaire Investor Tim Draper Calls for Crypto Regulatory Clarity
Tim Draper recently shared some insights on the matter of the tussle between the crypto sector and the Securities and Exchange Commission. He explained that all crypto exchanges in the country expect some degree of regulatory compliance.
He also maintained that financial markets are historically subjected to rules and guidelines depending on their legal classification. Considering these factors, Draper claimed that SEC’s approach to going to war against crypto seems counterproductive. He said that historically speaking there have always been bad actors in traditional financial markets.
However, the job of the SEC is to safeguard the position of the consumers and offer regulatory clarity for cryptocurrency enterprises. He claimed that as long as there are cases like FTX present in the market, it calls for regulators to monitor the situation.
While he criticized the action of the SEC, he appreciated Coinbase’s stance concerning the SEC lawsuit. Draper also declared his Bitcoin position as an early investor and maintained that blockchain has the potential to transform the global economic and financial infrastructure.