Bittrex Faced Enforcement Action from Florida before Bankruptcy Declaration

The Florida Office of Financial Regulation (OFR) said it issued a three-count complaint against Bittrex in late April, days before the troubled cryptocurrency exchange filed for bankruptcy protection in May. In the complaint, OFR accused Bittrex of failing to segregate its customer’s assets from its own operating capital and not maintaining a surety bond in the correct amount at all times.

Florida Reveals Case against Bittrex

Brandon Greenberg, an Assistant General Counsel at the OFR, disclosed the details in a court declaration filed yesterday (Wednesday) before the bankruptcy court in the District of Delaware. Greenberg filed the statement in support of the state regulator’s objection to Bittrex’s motion for an 'automatic stay', which is a court order that stops creditors from taking certain actions against a bankrupt firm's estate. According to the court filing, the complaint sent to Bittrex was the product of a multi-state investigation that includes financial regulators from Texas, Maryland and Michigan.

On March 31, Riche Lai, the Co-Founder and CEO of Bittrex, announced that the cryptocurrency exchange had begun winding down its services in the country as “operating in the US is no longer feasible.” OFR said its received Bittrex’s notice about the move, plus the exchange’s intention to surrender its license “on or before April 30, 2023.”

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