Bittrex Exchange Bankruptcy: Customers Leaving Money Behind – Here's the Latest
The majority of Bittrex US customers are leaving money behind by failing to claim their assets.
The deadline for approximately 1.6 million customers to claim their crypto assets on Bittrex US and Bittrex Malta exchanges passed on August 31.
However, only 35,972 customers, less than 3% of those identified by the court, actually made claims, resulting in a total value of $143.76 million, according to a recent status update hearing.
What makes this situation notable is that Bittrex, the US division of Bittrex Global, was not insolvent.
It had revealed plans to return 100% of customer assets through its Chapter 11 bankruptcy proceedings, allowing customers to withdraw their crypto holdings entirely.
Patty Tomasco, a partner at Quinn Emanuel and bankruptcy legal counsel for Bittrex, told Axios that the lack of engagement from customers can be attributed to inactive accounts and low balances.
In fact, 77% of the remaining customer balances were below $100, with most accounts having been inactive for over a year.
Tomasco noted that customers expressed reluctance to provide extensive personal information for what they considered small sums.
"Anecdotally I've been monitoring Bittrex Twitter and Bittrex Reddit where customers were engaging more. The sentiment is 'I don't want to give you all this information [for $35].'"
To withdraw funds from the platform, customers had to provide their current address, contact information, "Know Your Customer" (KYC) details, and accept the updated Terms of Service.
The KYC process involved providing an email associated with the account, date of birth, social security or EIN numbers, and a driver's license or passport number.
One customer, who had approximately $300 in crypto stored in a long-inactive
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