Bittrex bankruptcy filings reveal $500m of suspicious transactions

Bittrex’s bankruptcy filings are riddled with tens of thousands of contradictory, suspicious, and improbable transactions, perchance impacting the astir 2 cardinal customers who held funds connected the crypto speech earlier it collapsed successful 2023.

“Certain patterns successful the filed documents instantly raised superior reddish flags,” Pasha Onur, a regulatory compliance researcher who analysed the documents, told DL News.

“Our investigation of tribunal documents and Bittrex blistery and acold wallets reveals implicit $500 cardinal successful fabricated transactions filed with the bankruptcy tribunal crossed aggregate dockets.”

DL News reviewed Onur’s investigation and recovered tens of thousands of tiny, economically impractical transactions, implicit 10,000 clustered, repetitive withdrawals for the aforesaid circumstantial amounts of crypto, and hundreds of transactions connected a blockchain web that unopen down years earlier the transactions were supposedly conducted.

Founded successful Seattle successful 2014, Bittrex gained traction by utilizing acold retention for idiosyncratic funds and offering trading for a wide scope of cryptocurrencies.

The exchange, which had a past of regulatory malfeasance, filed for bankruptcy successful May 2023, weeks aft the US Securities and Exchange Commission accused it of operating an unregistered securities exchange. It unopen down successful December of the aforesaid year.

Bittrex Global and its bankruptcy cause Omni Agent Solutions did not respond to requests for comment.

If ample swaths of transactions submitted successful Bittrex’s bankruptcy filings are inaccurate, it could importantly interaction creditors attempting to claw backmost funds from the defunct exchange.

Bittrex had astir 1.6 cardinal users erstwhile it filed for bankruptcy. However, conscionable nether 36,000 users — little than 3% — filed claims.

“If withdrawal transactions are fabricated, lawsuit relationship balances are wrong, meaning creditor assertion amounts are incorrect,” Onur said.

The database of the apical 20 creditors, which is utilized for conflict-of-interest checks and organisation priority, is besides calculated from this corrupted data, Onur said.

Bankruptcy claims for Bittrex Global closed successful April this year. It has yet to wage creditors.

At the clip of the exchange’s bankruptcy filing, the US Treasury’s Office of Foreign Asset Control, oregon OFAC, was its biggest creditor owed to a $24 cardinal unpaid colony pursuing sanctions violations successful 2022.

OFAC did not respond to a petition for comment.

The fiscal statements analysed by Onur covered the 90-day play earlier Bittrex filed for bankruptcy, and were submitted to the tribunal successful June 2023.