Reuters reported on May 10 that a bankruptcy judge in the United States had granted Bittrex‘s request for a $7 million loan from its parent company.
Bittrex to Start Bankruptcy Case and Needs 250 BTC Loan for it
The company will be permitted to borrow 250 BTC (worth $7 million), according to Judge Brendan Shannon at a hearing in court. In a hearing in June, the company will also make an effort to obtain 450 BTC by demanding yet another loan. That loan will be worth $12.4 million if the price of Bitcoin stays constant through next month, making the two loans’ combined value up to $19 billion.
About the Loan
The loan is said to make the bankruptcy process go smoothly even though the company claims that it can afford to repay all clients in cryptocurrency.
Due to the unique characteristics of Bitcoin, including its low-interest rate and volatility protections, Judge Shannon notably decided to approve the loan. When paying back the loan, the company won’t be required to contribute more than 110% of the current price of Bitcoin. The loan will be given to the company by its parent organization, Aquila Holdings.
About Bittrex’s Bankruptcy
Bittrex said that it would stop operating in the United States on March 31 because of regulatory difficulties. The U.S. Securities and Exchange Commission then accused the company of operating an unlicensed securities exchange on April 17. On May 8, the company finally disclosed that it would declare bankruptcy in the US without stopping its activities abroad.
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