What to Know:
- Bittrex’s bankruptcy records reveal over $500 million in allegedly fabricated transactions, including activity on defunct blockchains.
- Research points to tens of thousands of improbable withdrawals and duplicate Bitcoin transactions, raising doubts over creditor claims.
- The exchange, already fined for past compliance failures, now faces deeper scrutiny as investigators question the accuracy of its bankruptcy filings.
Bittrex’s bankruptcy filings reportedly found tens of thousands of inconsistent and improbable transactions. Some of these transactions were even on blockchains that no longer exist. The findings raised serious questions about the accuracy of the details submitted to the court and the integrity of creditor claims linked to the collapsed crypto exchange.
Bittrex Faces Probe over $500M in Fake Transactions
Researcher Pasha Onur revealed that over $500 million worth of fabricated transactions appeared across several bankruptcy dockets. According to Onur, thousands of tiny transfers, repetitive withdrawals of identical amounts, and suspicious activity on discontinued blockchain networks all pointed to systemic irregularities.
Bittrex, known for storing customer assets in cold wallets for security, found its track record with regulators was far from spotless. The exchange faced repeated compliance failures, culminating in a 2023 bankruptcy filing following charges by the US Securities and Exchange Commission (SEC) for operating an unregistered securities exchange. By the end of that year, the platform had fully shut down.
Requests for comment sent to Bittrex Global and its bankruptcy administrator, Omni Agent Solutions, went unanswered.
If a large share of the transactions filed in the bankruptcy case are inaccurate, the implications could be far-reaching. The data underpinning customer balances, creditor claims, and payment priorities may all be compromised. Bittrex reported 1.6 million users at the time of its collapse, but only 36,000, less than three percent, filed claims.
“If withdrawal transactions were fabricated, account balances would be misrepresented,” Onur explained. “That means creditors could be claiming amounts that don’t reflect reality.”
The issue extends to the list of the top 20 creditors, a document that plays a crucial role in establishing potential conflicts of interest and determining distribution order. Any inaccuracy in that list could distort how remaining assets are divided.
Bankruptcy claims for Bittrex Global officially closed in April 2025, but no payouts have been made. At the time of filing, the US Treasury’s Office of Foreign Assets Control (OFAC) was Bittrex’s largest creditor, linked to a $24 million unpaid sanctions settlement from 2022. OFAC declined to comment on the matter.
Onur’s review covered the 90 days leading up to the exchange’s bankruptcy. During this time, Bittrex enforced strict withdrawal limits, cash withdrawals required a minimum of $35 with a $25 fee, and crypto withdrawals were subject to fees two to three times higher than the average blockchain transaction cost.
Despite those conditions, investigators found over 21,500 withdrawals below the minimum threshold. Many were worth only a few cents, far less than the fees required to process them. “These transactions make no economic sense,” Onur noted. “They suggest something other than genuine user activity.”
The irregularities did not stop there. Over 10,000 withdrawals of identical Bitcoin amounts occurred on the same day, each recorded to eight decimal places. Statistically, it is nearly impossible for thousands of individual users to withdraw the exact same fractional sum simultaneously.
Another anomaly involved over 200 transactions referencing an asset labeled “LMC.” DL News identified this token as LoMoCoin, a project whose blockchain shut down in 2021, two years before the supposed transactions took place.
Bittrex’s regulatory troubles began long before its bankruptcy. In 2019, the New York State Department of Financial Services (NYDFS) rejected its application to operate within the state, citing serious flaws in its anti-money laundering (AML) and sanctions compliance programs. Regulators found that several users had opened accounts with false names such as “Elvis Presley,” “Donald Duck,” and “Give me my money.”
In 2022, Bittrex faced $53 million in fines for sanctions violations and for facilitating $263 million in illicit transactions between 2014 and 2017. The following year, it reached a $24 million settlement with the SEC over charges of operating as an unregistered exchange, broker, and clearing agency.
