The Topsy-Turvy World of Bittrex Bankruptcy
The US Department of Justice (DOJ) has decided to put on its superhero cape and file an objection to Bittrex’s motion. That’s the bankrupt cryptocurrency exchange, in case you’re not living in a crypto cave. Bittrex is attempting to let its customers reclaim their precious crypto and fiat funds, but the DOJ doesn’t think this is a fairytale ending just yet.
Who’s the Big Bad creditor?
In this game of financial musical chairs, the biggest creditor at the soirée is none other than the U.S. Treasury’s Office of Foreign Assets Control (OFAC). They have a firm grip on Bittrex’s largest debt, but the DOJ argues that they should not get any preferential treatment. A little sibling rivalry, if you will.
The Backstory: What Went Down?
Between 2014 and 2017, Bittrex allowed transactions for individuals in you-know-where – Crimea, Cuba, Iran, Sudan, and Syria. Thanks to this fun party, OFAC and the Financial Crimes Enforcement Network (FinCEN) hit them with some hefty penalties worth $24 million and $29 million respectively. Ouch! Bittrex is still recovering from this financial hangover.
Will Bittrex Customers Get Their Cash?
Bittrex’s proposal to reimburse customers is a glimmer of hope in this crypto desert. However, the DOJ insists that any plan allowing some creditors to leapfrog ahead of others just won’t fly. They want their slice of the pie too!
DOJ’s Argument: Fairness or Funky?
In a daring act of legal bravado, the DOJ stated: “Fairness and equity demand that if the OFAC and FinCEN Debts cannot be paid in full by confirmation, the United States should have a chance to prove that the cryptocurrency assets belong to the Debtors and can be clawed back from the customers.” You know when something is ‘premature,’ like the time you tried to microwave a Pop-Tart? Yeah, that’s what the DOJ is saying about Bittrex’s bankruptcy motion. The courtroom showdown is set for June 14th!
