The United States Department of Justice (DOJ) has filed an objection to a motion by bankrupt cryptocurrency trading platform Bittrex to allow clients to withdraw their cryptocurrency and fiat money. Lhe US Treasury’s Office of Foreign Assets Control (OFAC) is Bittrex’s largest creditor, but its claim would be subservient to Bittrex’s proposal.
Bittrex was accused in October by both OFAC and the Treasury Financial Crimes Enforcement Network (FinCEN) of violating sanctions for allowing individuals based in Crimea, Cuba, Iran, Sudan and Syria to conduct transactions between 2014 and 2017. agencies assessed sanctions of USD 24 million and USD 29 million, respectively.
A Bittrex spokesperson told Cointelegraph at the time that the exchange was “pleased” to settle the charges.. It agreed to pay its $24 million fine to FinCEN, receiving a $5 million credit from FinCEN, while OFAC credited $24 million to Bittrex, which remains Bittrex’s largest debt.
The problems of the cryptocurrency platform did not end there. The US Securities and Exchange Commission sued Bittrex for trading in unregistered securities in April, and that action could also result in monetary penalties.. In May, Bittrex filed for bankruptcy in the US Bankruptcy Court for the District of Delaware. Just days after filing for bankruptcy, Bittrex proposed a plan to compensate your customers.
Interesting. Number One creditor for #Bittrex is OFAC (Office of Foreign Assets Control) responsible for AML (Anti Money Laundering) admin & enforcer of economic & trade sanctions based on US foreign policy & national security goals. Now we know why they went into Chapter 11. pic.twitter.com/sAg96t3jv3
—Simon Dixon (@SimonDixonTwitt) May 9, 2023
Interesting. #Bittrex’s number one creditor is OFAC (Office of Foreign Assets Control) responsible for the administration and enforcement of AML (Anti-Money Laundering) economic and trade sanctions based on US foreign policy and security objectives. national. Now we know why they entered Chapter 11.
The Department of Justice argument in its June 7 filing that Bittrex’s proposal incorrectly applies the standard that would allow it to pay some creditors before others. The document said:
“Fairness and equity demand that if OFAC and FinCEN debts cannot be paid in full through confirmation, the United States should be given the opportunity to demonstrate that the cryptocurrency assets belong to the debtors and can be recovered from customers” .
The Justice Department also objected that Bittrex’s motion is premature, as the court has yet to confirm Bittrex’s bankruptcy. The bankruptcy hearing will be held on June 14.
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