According to court documents, the Bittrex exchange failed to separate customer assets from the company’s operating capital. Also, Florida authorities accuse the site of ignoring part of its obligations.
“It will be up to OFR to decide which of these violations to charge for in our administrative complaint,” said Brandon Greenberg, assistant general counsel for the Florida Office of Financial Regulation (OFR)
Recall that on March 31, Bittrex announced it was winding down operations in the U.S., citing an uncertain “regulatory and economic environment”. In May, the exchange filed for bankruptcy. And in April, after an investigation, OFR sent a complaint to the platform. On the same day, the U.S. Securities and Exchange Commission (SEC) accused the company of violating federal laws;
OFR advised the company to follow the administrative procedure if it is interested in “a more substantive discussion and possibly exploring settlement options.”</nbsp
Greenberg said the exchange later expressed “disappointment” that OFR had taken enforcement action instead of allowing the company to surrender its license and leave Florida. According to Greenberg, the platform also did not disclose plans to file for bankruptcy at the time.
Bittrex recently filed a motion with the court to dismiss the SEC’s lawsuit. In it, Bittrex management argues that even if the initial sale of any cryptoassets can be considered an investment contract, cryptoassets traded on the secondary market cannot be classified as securities.