Bittrex may face enforcement action in Florida due to bankruptcy.
The Florida Office of Financial Regulation is considering taking action against Bittrex, a cryptocurrency exchange based in the United States, which filed for Chapter 11 bankruptcy protection in May.
In a filing on July 5th with the U.S. Bankruptcy Court for the District of Delaware, Brandon Greenberg, Assistant General Counsel for the Florida Office of Financial Regulation (OFR), stated that the state regulator had received information regarding Bittrex’s alleged non-compliance with Florida law. Greenberg mentioned that the OFR still has the discretion to decide whether or not to charge Bittrex.
The U.S. Securities and Exchange Commission (SEC) filed a complaint against Bittrex on April 17th, and the exchange surrendered its money transmitter license in Florida on April 30th. Bittrex then filed for bankruptcy on May 8th. At that time, the OFR stated that the surrender of Bittrex’s license would not affect their prosecution of the complaint, which included accusations of the company’s failure to segregate customer assets with its operating capital, failure to maintain a surety bond, and another undisclosed complaint.
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The SEC’s enforcement action, the bankruptcy case, and the potential lawsuit in Florida followed Bittrex’s announcement that it would wind down its operations in the United States by April, citing ongoing regulatory uncertainty in the country. The exchange declared on June 15th that certain users could access their accounts and withdraw funds until August 31st.
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Although the SEC filed separate charges against Bittrex Global in April, the global exchange has largely been unaffected by the regulatory and financial issues faced by the U.S. exchange. The global firm is regulated in Liechtenstein and Bermuda.
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