BitMEX is one of the world’s largest cryptocurrency trading platforms. Last year, the U.S. District Court for the Southern District of New York entered a Consent Order that the U.S. Commodities Futures and Trading Commission agreed to with five companies charged with operating BitMEX. The order required the BitMEX entities to pay a $100 million civil monetary penalty. (read more here). Earlier this year, the three co-founders of the company plead guilty to violating the Bank Secrecy Act by willfully failing to establish, implement, and maintain an anti-money laundering program at BitMEX. (read more here).
On May 5, 2022, the CFTC announced that, in the civil lawsuit, the court entered consent orders requiring the company’s co-founders — Arthur Hayes, Benjamin Delo and Samuel Reed — to each pay a $10 million fine. They were also enjoined from further violations of the Commodity Exchange Act (CEA) and CFTC regulations.
The consent orders found that, from at least November 2014 through October 1, 2020, each of the co-founders controlled BitMEX and was responsible for BitMEX’s violations of the CEA and CFTC regulations because they failed to implement and enforce effective controls to prevent or detect BitMEX’s unlawful conduct (including operating of a facility to trade or process swaps without having the necessary CFTC approval). In addition, according to the CFTC, BitMEX operated as a Futures Commission Merchant (FCM) without CFTC registration, failed to implement a Customer Information Program (CIP) and Know-Your-Customer (KYC) procedures, and failed to implement an adequate Anti-Money Laundering (AML) program.
Sentencing on the criminal charges is scheduled to take place in the upcoming weeks.