Prior to filing for bankruptcy in May 2023, cryptocurrency exchange Bittrex was accused by Florida financial regulators of violating multiple Florida laws, July 5. made clear in documents filed with the court.
Documents filed by Brandon Greenberg, deputy general counsel for the Florida Office of Financial Regulatory Affairs (OFR), prohibit certain creditors from initiating or continuing actions on bankrupt properties We are against Bittrex’s request for Automatic Stay. According to Greenberg, regulators had advised US-based Bittrex to find ways to avoid filing charges against the company.
The exchange was accused, among other things, of failing to separate client assets from the company’s working capital and of failing to “maintain an appropriate amount of reserves at all times.”
“It is within the OFR’s administrative discretion to decide which violations to charge or not to charge in our administrative complaint,” Greenberg asserted.
From October 2022 to March 2023, OFR worked with financial regulators in Texas, Maryland, and Michigan to “multi-stately review Bittrex,” according to the filing.
On March 31, Bittrex announced it would scale back its operations in the United States, citing an uncertain “regulatory and economic environment.”
As a result of the investigation, the OFR issued a three-counter complaint against the exchange on April 17, Greenberg said in the filing. On the same day, the U.S. Securities and Exchange Commission (SEC) indicted the company, which operates exchanges, brokers and clearing houses, for violating federal law. The OFR has advised Bittrex to follow administrative procedures if it is interested in “having discussions and potentially seeking avenues of settlement,” according to the filing.
According to Greenberg, Bittrex later expressed “disappointment” that the OFR took action instead of forcing Bittrex to relinquish its license and leave Florida. Greenberg said the platform did not disclose any plans to file for bankruptcy at the time.
Bittrex surrendered its remittance license on April 30, but the company’s lawyers insisted, “There may have been regulatory issues in the past, but we have since complied with Florida law.” “bottom.
“In response, I would like to point out that the OFR investigation found that Bittrex violated several provisions of Section 560 of the Florida Code, which is a continuing violation of the Money Services Business Act. “It showed a pattern of non-compliance, and it was within our administrative discretion to decide which violations to charge or not to charge in the administrative complaint,” Greenberg said. says Mr. On May 8, the company filed for bankruptcy in Delaware.
｜Translation: CoinDesk JAPAN
｜Editing: Toshihiko Inoue
| Image: Nikhilesh De/CoinDesk
｜Original: Bittrex Faced Enforcement Action From Florida Regulator Ahead of Bankruptcy