Bittrex to receive 250 BTC loan valued at $7M to start bankruptcy case
A later request could bring the loan's total value up to $19 million.
A U.S. bankruptcy judge has approved Bittrex’s request for a $7 million loan from its parent company, Reuters said on May 10.
Bittrex to gain $7M loan, possibly more
Judge Brendan Shannon said during a court hearing that Bittrex will be allowed to borrow 250 BTC, an amount currently worth $7 million.
Bittrex will also attempt to obtain 450 BTC by requesting another loan in a June hearing. If the price of Bitcoin remains stable until next month, that loan will be worth $12.4 million, meaning that the two loans could be worth $19 billion in total.
Though Bittrex says that it can afford to pay back all customers in cryptocurrency, the loan will reportedly help the bankruptcy proceed without issue.
Judge Shannon notably agreed to permit the Bitcoin loan due to the cryptocurrency’s specific features, such as its low interest rate and volatility protections. Bittrex will not need to pay back more than 110% of Bitcoin’s current value when it repays the loan.
Bittrex will receive the loan from its parent company, Aquila Holdings.
Bittrex filed for bankruptcy this week
Bittrex suggested as early as March 31 that it would halt U.S. operations due to regulatory challenges. The U.S. Securities and Exchange Commission then charged Bittrex on April 17, stating that the firm operated an unregistered securities exchange.
The firm finally announced on May 8 that it would file for U.S. bankruptcy without halting its global operations. The company reported that its assets and liabilities were each between $500 million and $1 billion and said it had more than 100,000 creditors.
Bittrex reported a reasonably low trading volume of $7.2 million in the past 24 hours.