Bittrex Faces Florida Action

The Florida Office of Financial Regulation is contemplating taking action against Bittrex, an American cryptocurrency exchange that filed for Chapter 11 bankruptcy in May.

Brandon Greenberg, assistant general counsel for the Florida Office of Financial Regulation (OFR), stated in a July 5 filing with the U.S. Bankruptcy Court for the District of Delaware that the state regulator had been informed of Bittrex’s alleged failure to comply with Florida law.

According to Greenberg, the OFR retained “administrative discretion” over whether or not to assess fees to Bittrex. On April 17, the U.S. Securities and Exchange Commission complained about Bittrex.

On April 30, the exchange surrendered its Florida money transmitter license, and on May 8, Bittrex filed for bankruptcy. The OFR stated at the time that Bittrex’s surrender of its license “would not affect our prosecution of the Complaint”, which included allegations that the company had failed to segregate customer assets from its operating capital, failed to maintain a surety bond, and another complaint that was redacted from the court filing.

The SEC enforcement action, bankruptcy case, and prospective Florida lawsuit followed Bittrex’s announcement that it would cease operations in the United States by April, citing “continued regulatory uncertainty” in the country.

The exchange announced on June 15 that certain customers could withdraw funds from their accounts until August 31.

Even though the SEC filed separate accusations against Bittrex Global in April, the global exchange has been largely unaffected by the regulatory and financial difficulties the U.S. exchange is experiencing.

The global organization is governed by Liechtenstein and Bermuda.