- Regulator accuses the exchange of violating state laws
- Bittrex recently said it will sue the SEC
- OFR conducted an inspection of the company from October 2022 to March 2023
American cryptocurrency exchange Bittrex has run into trouble in Florida. The local regulator accused the exchange of violating several state laws before Bittrex filed for bankruptcy in May, and advised it to find ways to resolve the dispute.
The statement from OFR Assistant General Counsel, Brandon Greenberg, objected to Bittrex’s request for Automatic Stay. This law prohibits certain creditors from initiating or continuing action against a company that is in bankruptcy. Greenberg confirms that the regulator advised the U.S. company to explore ways to resolve the allegations that were made against it.
The platform received allegations that it failed to properly separate customer assets from its operating capital and failed to continuously enforce surety requirements.
The statement also writes that from October 2022 through March 2023, OFR worked with financial regulators from three states to conduct a “multi-state” audit of Bittrex.
In a March 31 announcement. Later, on May 8, the cryptocurrency exchange filed for bankruptcy. According to court documents, the company has about 100,000 creditors with total liabilities ranging from $500 million to $1 billion.