Crypto exchange Bittrex Inc. was accused of violating multiple Florida laws by the U.S. state’s financial regulator ahead of the platform’s bankruptcy filing in May, according to court filings from Wednesday. Brandon Greenberg, assistant general counsel to the Florida Office of Financial Regulation (OFR), stated in the filing that the regulator had advised Bittrex Inc. on exploring avenues for settling charges against it. The platform was accused of failing to segregate customer assets with the company’s operating capital and ‘failure to maintain a surety bond in the correct amount at all times.’
The filing also revealed that between October 2022 and March 2023, the OFR worked with financial regulators from Texas, Maryland, and Michigan on a multistate examination of Bittrex Inc. On April 17, the OFR issued a three-count complaint to the exchange platform. On the same day, the U.S. Securities and Exchange Commission accused the firm of violating federal laws by operating a securities exchange, broker, and clearing agency.
Greenberg said that the exchange later expressed its disappointment that the OFR had taken enforcement action instead of letting the company surrender its license and leave Florida. The platform also did not reveal plans to file for bankruptcy at that time. Bittrex Inc. surrendered its money transmitter license on April 30, but counsel for the platform also stridently asserted that although it may have had regulatory issues in the past, it had been compliant with Florida law since then.
Deciding which of those violations to charge or not charge in our Administrative Complaint falls squarely within the OFR’s administrative discretion, Greenberg argued in his declaration. On May 8, the platform filed for bankruptcy in the state of Delaware.