Bittrex receives confirmation of Chapter 11 plan of liquidation

By Sarah Lizee

Olympia, Wash., Oct. 30 – Desolation Holdings LLC, which does business as Bittrex, received confirmation of its Chapter 11 plan of liquidation from the U.S. Bankruptcy Court for the District of Delaware on Monday, according to an order.

Bittrex had reported the results of voting on Friday ahead of the confirmation hearing.

The company said 122 ballots were received for class 2A customer claims. Of those, 92.62% in number of votes and 98.53% in dollar amount, or $251,744.74, voted to accept the plan, while 7.38% in number of votes and 1.47% in dollar amount, or $3,750.29, voted to reject the plan.

For class 2B Malta OpCo customer claims, there were 16 ballots received. Of those, 75% in number of votes and 15.79% in dollar amount, or $113,068.95, voted to accept the plan, while 25% in number of votes and 84.21% in dollar amount, or $603,806.71, voted to reject the plan.

Three ballots were received for the class 3 general unsecured claims class. All three, holding $78,763.37 in dollar amount of claims, voted to accept the plan.

Under the plan, general administrative claims, debtor-in-possession loan claims and other priority claims will be paid in full.

Holders of Bittrex, Inc. customer claims and Bittrex Malta Ltd. customer claims will receive a distribution of like-kind cryptocurrencies to holders of customer claims by providing access to the debtors’ platform for withdrawal of 100% of the amount of cryptocurrencies associated with such customer’s account as of the petition date.

Customers will be required to pay any fees charged by third parties in connection with the withdrawal of cryptocurrencies, provided further that customer distributions are subject to non-economic crypto distributions, provided further that it may not be possible for customers to successfully withdraw defunct crypto.

Customers who have already withdrawn the full amount of cryptocurrencies associated with their accounts under the previous customer withdrawal order will not receive an additional customer distribution.

Holders of general unsecured claims will receive payment in cash in an amount equal to their claims no later than six months after the effective date.

Holders of subordinated claims will receive, after general unsecured claims have been paid in full, cash in an amount equal to the claims no later than six months after the effective date.

Existing interests in BUS will survive and continue to exist as interests in the wind-down entity, which entitles each holder of an allowed class 5 interest in BUS will be entitled to a pro rata payment of any remaining wind-down assets, if any, or the proceeds thereof after all allowed claims have been paid in full.

On the effective date, existing interests in all debtors, other than BUS, will be deemed canceled with no distribution.

The plan incorporates a settlement with the Securities and Exchange Commission, through which the company has agreed to pay $24 million. As previously reported, the SEC alleged that Bittrex and its co-founder and former chief executive officer, William Shihara, operated an unregistered national securities exchange, broker and clearing agency.

Bittrex is a cryptocurrency trading platform with headquarters in Seattle. The company filed bankruptcy on May 8 under Chapter 11 case number 23-10597.

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