Bittrex may still face enforcement action in Florida amid bankruptcy

Florida Office of Financial Regulation and Bittrex

The Florida Office of Financial Regulation is weighing action against Bittrex, a U.S.-based crypto exchange that filed for Chapter 11 bankruptcy protection in May. According to a July 5 filing with the U.S. Bankruptcy Court for the District of Delaware, Brandon Greenberg, assistant general counsel for the OFR, noted that the state regulator had been provided with information about Bittrex’s alleged breach of Florida law, and still held the “administrative discretion” to charge or not charge the exchange.

The SEC had previously filed a complaint against Bittrex on April 17, and the exchange had surrendered its Florida money transmitter license on April 30, before filing for bankruptcy on May 8. The OFR had stated that Bittrex surrendering its license “would not affect our prosecution of the Complaint”, which included allegations that the firm had failed to segregate customer assets with its operating capital, failed to maintain a surety bond, and another complaint which was redacted from the court filing.

Bittrex had announced it would be winding down operations in the U.S. due to “continued regulatory uncertainty”, and on June 15, certain users were allowed to access their accounts and withdraw funds until Aug. 31.

The SEC filed separate charges against Bittrex Global in April, yet the crypto exchange based in Liechtenstein and Bermuda has not been significantly impacted by the regulatory and financial issues the U.S. exchange is facing. Despite the SEC crypto regulations, the global firm continues to operate in real time.

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