Bittrex customers can now withdraw their funds after a US judge signed a court order.
A US district judge has signed a court order allowing Bittrex customers to withdraw their assets from the platform, following a dispute between the court and the US government.
“The Court hereby authorizes, but does not direct, the Debtors to permit their customers holding undisputed, noncontingent, and liquidated claims to withdraw cryptocurrency assets and fiat currency from the Debtors’ trading platform to the extent of such claims,” US Bankruptcy Judge Brendan L. Shannon said in the court filing.
This decision has been made after the US Department of Justice objected to a proposal by Bittrex, which is now bankrupt, to return money to its customers as part of the exchange’s liquidation plan.
The Justice Department said the proposal was “premature” and that it “improperly attempts to subordinate creditors outside of a plan.”
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Bittrex owes the government millions after law enforcement brought sanctions-related charges against the exchange last year.
Bittrex’s heat from regulators
Bittrex filed for bankruptcy in May in a federal court in Delaware after facing scrutiny from both the Justice Department and the US Securities and Exchange Commission.
The exchange shut down US operations earlier this year after it was fined $53 million by the Treasury’s Office of Foreign Assets Control and Finance Crime Enforcement Network, who said Bittrex failed to prevent customers in Iran, Cuba and other sanctioned nations from using its platform.
The SEC then charged Bittrex and its former CEO William Shirhara in April for operating as an unregistered exchange, broker and clearing agency.
The SEC said Bittrex and Shirhara collaborated with issuers to delete “problematic statements” from public channels, which could have led regulators to investigate crypto assets as security offerings.
The SEC also said that OMG, Dash, ALGO, Monolith (TKN), Naga (NGC) and IHT Real Estate Protocol (IHT) were unregistered securities offerings.