Florida Regulator Mulls Action on Bittrex Amid Bankruptcy Proceedings


Florida Regulator Mulls Action on Bittrex Amid Bankruptcy Proceedings

The Florida Office of Financial Regulation (OFR) is contemplating taking action against Bittrex, a United States-based cryptocurrency exchange, which filed for Chapter 11 bankruptcy protection in May.

According to a filing made on July 5 with the U.S. Bankruptcy Court for the District of Delaware, Brandon Greenberg, assistant general counsel at the Florida OFR, revealed that the state regulator had received information regarding Bittrex's alleged failure to comply with Florida law. Greenberg stated that the OFR retains the "administrative discretion" to decide whether to bring charges against Bittrex.

Bittrex had already surrendered its Florida money transmitter license on April 30, following a complaint filed by the U.S. Securities and Exchange Commission (SEC) on April 17. Subsequently, on May 8, Bittrex filed for bankruptcy. The OFR previously declared that the surrendering of the license by Bittrex would not impact its pursuit of the complaint, which accused the firm of various violations, including the failure to segregate customer assets with its operating capital and the failure to maintain a surety bond. Another complaint, whose details were redacted from the court filing, was also included.

Bittrex had announced in April its decision to wind down its operations in the United States by the end of April, citing the ongoing "regulatory uncertainty" in the country. On June 15, the exchange disclosed that certain users would be able to access their accounts and withdraw funds until August 31.

While the SEC had filed separate charges against Bittrex Global in April, the global exchange has experienced minimal impact from the regulatory and financial challenges faced by its U.S. counterpart. Bittrex Global is subject to regulations in Liechtenstein and Bermuda.

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