According to a recent filing in bankruptcy court, the Florida Office of Financial Regulation has indicated that it still has the authority to take action against Bittrex, a United States-based cryptocurrency exchange that filed for Chapter 11 bankruptcy protection in May.
In the filing submitted on July 5 to the U.S. Bankruptcy Court for the District of Delaware, Brandon Greenberg, the assistant general counsel of the Florida Office of Financial Regulation (OFR), stated that the regulator had received information regarding Bittrex’s alleged non-compliance with Florida law. Greenberg mentioned that the OFR retains the “administrative discretion” to either press charges or refrain from doing so against Bittrex.
Earlier, on April 17, the U.S. Securities and Exchange Commission (SEC) had filed a complaint against Bittrex, and the exchange subsequently surrendered its Florida money transmitter license on April 30. Bittrex then filed for bankruptcy on May 8. The OFR previously stated that the surrender of Bittrex’s license would not impact its prosecution of the complaint, which included allegations such as failure to segregate customer assets from operational funds and failure to maintain a surety bond. One additional complaint mentioned in the court filing was redacted.
Bittrex had announced its decision to wind down its U.S. operations by April due to ongoing regulatory uncertainty in the country, leading to the SEC enforcement action, the bankruptcy filing, and the potential lawsuit in Florida. However, on June 15, the exchange informed certain users that they could access their accounts and withdraw funds until August 31.
It’s worth noting that Bittrex Global, the global counterpart of Bittrex, has faced fewer repercussions from the regulatory and financial challenges confronted by its U.S. counterpart. Bittrex Global operates under regulation in Liechtenstein and Bermuda.