A US bankruptcy judge has approved Bittrex’s request for a $7 million loan from its parent company, Reuters said on May 10.
Bittrex gets $7 million loan, possibly more
Judge Brendan Shannon said at a hearing that Bittrex could borrow 250 BTC, an amount currently worth $7 million.
Bittrex will also try to obtain 450 BTC by applying for a new loan at a hearing in June. If Bitcoin’s price holds steady through next month, that loan will be worth $12.4 million, meaning the two loans could be worth $19 billion in total.
While Bittrex says it can afford to repay all customers in cryptocurrency, the loan will reportedly help it go through bankruptcy without a hitch.
Judge Shannon specifically agreed to allow the Bitcoin loan because of the specifics of the cryptocurrency, such as low interest rates and volatility protection. Bittrex does not have to pay back more than 110% of Bitcoin’s current value when it pays back the loan.
Bittrex receives the loan from its parent company, Aquila Holdings.
Bittrex filed for bankruptcy this week
Bittrex already suggested on March 31 that it would shut down US operations due to regulatory concerns. The U.S. Securities and Exchange Commission subsequently sued Bittrex on April 17, alleging that the company operated an unregistered stock exchange.
The company finally announced on May 8 that it would file for US bankruptcy without ceasing its global operations. The company reported that its assets and liabilities were between $500 million and $1 billion each and said it had more than 100,000 creditors.
Bittrex reported a fairly low trading volume of $7.2 million in the past 24 hours.
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