A US bankruptcy judge has approved a $7 million loan request from Bittrex’s parent company, according to Reuters. May 10th.
Bittrex Receives $7M Loan, Possibly More
Judge Brendan Shannon said at the court hearing that Bittrex will be allowed to borrow 250 BTC, currently worth $7 million.
Bittrex will also attempt to acquire 450 BTC by requesting another loan at a public hearing in June. If the Bitcoin price stabilizes by next month, the loan will be worth $12.4 million, making the two loans worth a combined $19 billion.
Bittrex says it can afford to repay all its customers in cryptocurrency, but the loan will reportedly help it go through bankruptcy without a hitch.
It is worth noting that Judge Shannon agreed to allow Bitcoin loans because of the unique characteristics of cryptocurrencies, such as low interest rates and volatility protection. Bittrex does not have to pay back more than his 110% of the present value of Bitcoin when repaying the loan.
Bittrex will be financed by parent company Aquila Holdings.
Bittrex filed for bankruptcy this week
Bittrex hinted on March 31 that it would cease operations in the US, citing regulatory challenges. The U.S. Securities and Exchange Commission then filed a complaint against Bittrex on April 17, accusing him of operating an unregistered stock exchange.
The company finally announced on May 8 that it would file for U.S. bankruptcy without halting global operations. The company reported assets and liabilities between $500 million and $1 billion each and said it had more than 100,000 creditors.
Bittrex reported a rather low trading volume of $7.2 million over the last 24 hours.
A post first appeared on CryptoSlate that Bittrex will receive a 250 BTC loan worth $7 million to start bankruptcy proceedings.
