The Florida Office of Financial Regulation (OFR) is contemplating taking action against Bittrex, a cryptocurrency exchange based in the United States, which recently filed for Chapter 11 bankruptcy protection. The OFR’s assistant general counsel, Brandon Greenberg, stated in a filing with the U.S. Bankruptcy Court for the District of Delaware on July 5 that the state regulator had received information about Bittrex’s alleged failure to comply with Florida law. However, Greenberg also mentioned that the OFR had the discretion to decide whether or not to charge Bittrex.
The exchange has been facing several challenges recently. On April 17, the U.S. Securities and Exchange Commission (SEC) filed a complaint against the exchange. Subsequently, Bittrex surrendered its Florida money transmitter license on April 30, and on May 8, the exchange filed for bankruptcy.
The OFR had previously stated that the exchange surrendering its license would not hinder its prosecution of the SEC’s complaint, which included allegations of failure to segregate customer assets, failure to maintain a surety bond, and another redacted complaint.
Bittrex vs SEC
The SEC’s enforcement action, the bankruptcy case, and the potential lawsuit in Florida all followed the exchange’s announcement in April that it would wind down its operations in the United States by April, citing ongoing regulatory uncertainty in the country. On June 15, the exchange informed certain users that they could access their accounts and withdraw funds until August 31.
It is worth noting that while the SEC filed separate charges against Bittrex Global in April, the global arm of the exchange has largely remained unaffected by the regulatory and financial issues faced by its U.S. counterpart. Bittrex Global is regulated in Liechtenstein and Bermuda, providing it with a different regulatory environment.
