Heimdall Says the Bittrex Bankruptcy Is a Regulatory Exit

1. Bittrex has filed for bankruptcy, the entity had onshore and offshore operations.
2. Heimdall says their move was to escape regulatory uncertainty.
3. It goes on to explain how filing for bankruptcy freed Bittrex.

Bittrex filing for bankruptcy may have seemed inevitable to some but to others it comes off as a bit of a ploy. According to Heimdall, a business tokenization solution for real-world assets, it certainly seems like it is the latter.

To many it seems the inevitability of Bittrex’s downfall was bound to be. After all, just a month ago, Bittrex was pushed into closing down its US branch due to Regulatory uncertainty. In addition, just a few days after, Bittrex faced another challenge to do with the SEC and Algorand case. 

1/ Quick thoughts on the #Bittrex bankruptcy and why we think it's more of a regulatory exit than a pure bankruptcy play.

— Heimdall (@heimdallrwa) May 9, 2023

According to Heimdall’s Twitter thread, the entity goes into detail to defend and justify their point of view on this matter. On why Heimdall thinks Bittrex’s bankruptcy is more of a regulatory exit, here’s why.

The thread highlights how Bittrex, like other crypto exchanges onshore in the USA, is both an onshore and offshore entity. The greater share of their business takes place offshore, says Heimdall.

Meanwhile, the onshore entities of Bittrex and other venues are likely to provide a large surface area for regulatory framework. It does so in an environment where they are likely guilty and have to be proven innocent. 

Over that, Bittrex also agreed to pay the US Treasury $29 million in October for violating sanctions. Then the SEC charged Bittrex for operating an unregistered national securities exchange, broker, and clearer. 

Due to the inevitable continuation of actions and fines, enforcement agencies began to join the party. So, the options for Bittrex Inc began to dwindle. The option to voluntarily shut down would not free them from all liabilities. 

However, filing for bankruptcy would create a greater opportunity, argues Heimdall. By doing this, not only would Bittrex be able to switch focus to offshore operations but it would also cut them off from past encumbrances.

Read also:

• Bittrex To Close Down US Branch Due to Regulatory Uncertainty
• Allegations of Bias Raised Against SEC in Bittrex and Algorand Case
• The DAO Architect Exit’s Ethereum, Says Web3 is a Mess
• A Full List of Entities With Exposure to FTX and Alameda is Out
• Shocking Revelation: Former FTX Execs Allegedly Received $3.2B From Related Entities

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