According to Reuters’ report dated May 10, a bankruptcy judge in the United States has granted Bittrex’s request for a loan of $7 million from its parent firm. During a hearing in court, Judge Brendan Shannon stated that Bittrex will be permitted to borrow 250 BTC, which is equivalent to a sum that is now worth $7 million.
Bittrex will also try to acquire 450 BTC by demanding another loan during the hearing that will take place in June. If the price of Bitcoin is able to hold steady until the end of the next month, the value of that loan will increase to $12.4 million. This would mean that the combined value of the two loans might be as high as $19 billion.
Even though Bittrex claims that it has the financial resources to reimburse all of its clients in bitcoin, the company has apparently decided to take out a loan in order to ensure a smooth bankruptcy process.
Because Bitcoin possesses its own unique characteristics, such as a low interest rate and protections against volatility, Judge Shannon decided to grant permission for the loan to be made using Bitcoin. When it comes time for Bittrex to return the loan, it will not be required to pay back more than 110% of Bitcoin’s current value.
The financing will be provided to Bittrex by Aquila Holdings, which is Bittrex’s parent firm.
Bittrex made a suggestion on March 31 that it will cease operations in the United States owing to challenges posed by regulatory authorities. After that, on April 17, the United States Securities and Exchange Commission filed charges against Bittrex, claiming that the company had been operating an unregistered securities exchange.
The company finally made the announcement on May 8 that it will file for bankruptcy in the United States without putting an end to its activities anywhere else in the world. The company stated that it had more than 100,000 creditors and that both its assets and its liabilities were in the range of between half a billion dollars and one billion dollars each.
Bittrex recorded a 24-hour trading volume of only $7.2 million, which is considered to be on the low end for cryptocurrency exchanges.