$500M in Suspicious Bittrex Transactions Found, Researcher Flags

Bittrex’s bankruptcy filings are filled with tens of thousands of contradictory, suspicious, and improbable transactions — a pattern that could affect nearly two million customers who held digital assets on the exchange before its 2023 collapse.

A regulatory compliance researcher’s review of court documents, along with Bittrex’s hot and cold wallet data, found over $500 million in allegedly fabricated transactions spread across multiple filings. These anomalies, the researcher warns, could significantly distort asset distribution to creditors.

Researcher Uncovers $500 Million in Unverified Bittrex Transactions

Financial statements covering the 90 days before Bittrex filed for Chapter 11 in May 2023 include more than $500 million in potentially fabricated transactions, according to researcher Pasha Onur. His analysis identified thousands of micro-transactions below the platform’s minimum withdrawal limit, as well as repeated withdrawals of identical fractional Bitcoin amounts. These inconsistencies, he said, may render customer balances and creditor claims inaccurate.

“Certain patterns in the filed documents immediately raised serious red flags,” Onur said. His review of court records and blockchain data concluded that over $500 million in “fabricated transactions” were filed with the bankruptcy court.

Bittrex, founded in Seattle in 2014, filed for bankruptcy in May 2023, just weeks after the U.S. Securities and Exchange Commission accused it of operating an unregistered securities exchange. The company shut down in December 2023.

Data Anomalies Could Distort Bittrex Creditor Payouts

Onur said the data anomalies could materially affect creditor recovery. If withdrawal transactions were fabricated, he explained, customer balances and creditor claim amounts would be wrong. Because that data also determines the list of the top 20 creditors, a key factor in conflict-of-interest checks and asset distribution, any inaccuracies could have wide-reaching implications.

Bittrex had roughly 1.6 million users at the time of its bankruptcy filing. Yet fewer than 36,000 filed claims. Claims for Bittrex Global closed in April 2025, and payments have yet to be distributed.

At the time of the filing, OFAC was listed as Bittrex’s largest creditor, due to a $24 million unpaid settlement stemming from sanctions violations in 2022.

Thousands of Impractical, Repetitive Transactions Raise Red Flags

Onur’s analysis focused on financial statements from the 90-day window before the bankruptcy, which were submitted in June 2023. During that period, the exchange required a minimum $35 cash withdrawal (including a $25 fee) and crypto withdrawal fees typically ranging from $5 to $20.

Despite those limits, the analysis found over 21,500 small crypto transactions valued far below the withdrawal fees. Onur questioned how such transactions could occur when they were “economically impractical.” Most of these micro-withdrawals appeared on the same day each month.

The filings also listed over 10,000 transactions, purportedly from customers, for the exact same fractional Bitcoin amount, all executed on the same day. Given Bitcoin’s precision to eight decimal places, Onur said it would be highly improbable for thousands of customers to withdraw identical amounts simultaneously.

Transaction logs further showed more than 200 transfers involving an asset labeled LMC. According to DL News, LMC refers to LoMoCoin, a blockchain network that stopped processing transactions in 2021. Yet the filings listed transactions in that asset two years after its network had gone inactive.

Bittrex’s Troubled Compliance Record Offers Clues

Bittrex had a long history of compliance issues. In 2019, the New York State Department of Financial Services denied its license application, citing deficiencies in anti–money laundering and OFAC compliance programs.

In 2022, Bittrex was fined $53 million for sanctions violations and for processing 263 million illegal transactions between 2014 and 2017. The exchange later settled with the SEC in 2023, agreeing to pay $24 million to resolve charges that it operated an unregistered exchange, broker, and clearing agency. Bittrex did not admit wrongdoing as part of the settlement.

Chain Street’s Take

Bittrex’s filings highlight how messy crypto bankruptcies can get when shaky compliance meets a high-stakes regulatory crackdown. Even if some transactions turn out to be reporting errors rather than fraud, the scale of anomalies underscores the risks of relying on opaque records for creditor recovery. For nearly 2 million former users, the numbers on paper may not match the reality in wallets.