BITMEX FOUNDERS MUST PAY A $30 MILLION CIVIL PENALTY, ACCORD | Global CRYPTO News
BITMEX FOUNDERS MUST PAY A $30 MILLION CIVIL PENALTY, ACCORDING TO THE COURT.
The CFTC has ordered the three co-founders to pay significant fines for their alleged involvement in “serious breaches of rules and the Commodity Exchange Act.”
The three co-founders of BitMEX, including former CEO Arthur Hayes, have been sentenced to pay a total of $30 million in civil monetary penalties by the United States District Court for the Southern District of New York.
According to a statement released by the Commodity Futures Trading Commission (CFTC) on Thursday, Hayes, Benjamin Delo, and Samuel Reed were each penalised $10 million in consent payments for violations of the Commodity Exchange Act and CFTC rules from November 2014 to October 2020.
On October 1, 2020, the Commodity Futures Trading Commission (CFTC) filed a lawsuit against the exchange and its three co-founders. The defendants were accused of “running the BitMEX platform while conducting major portions of BitMEX’s business from the United States, and unlawfully taking orders and payments from U.S. customers to trade cryptocurrencies,” including Bitcoin (BTC), Ether (ETH), and Litecoin (LTC) derivatives, according to the Commission.
Operation of a facility to trade or process swaps without CFTC authority to operate as a Designated Contract Market or a Swap Execution Facility, according to the CFTC. They also failed to execute a Customer Information Program, Know Your Customer (KYC) processes, or an acceptable Anti-Money Laundering (AML) program, according to the complaint, and operated as a Futures Commission Merchant without CFTC registration.
In a second statement released on Thursday, CFTC commissioner Carline D. Pham stated that her agency is dedicated to prosecuting “wrongdoers with an unfair advantage” who operate in violation of the law.
Added legal wrangling
In a second action brought by the US Department of Justice in February, Hayes and Delo pled guilty to violating the Bank Secrecy Act. They agreed to “willfully neglecting to create, execute, and maintain an Anti-Money Laundering (AML) program,” according to their plea agreement.
Hayes’ mother was anxious about how the federal judge presiding over the DOJ’s case would punish her son, according to Bloomberg. His lawyers asked for probation without house arrest or community detention, based on a letter from her pleading for leniency.
Last August, we reported that BitMEX agreed to pay the CFTC and the Financial Crimes Enforcement Center (FinCEN) $100 million in consent payments to settle a separate case in which the CFTC and FinCEN claimed that exchange operators HDR Global Trading Limited, 100x Holding Limited, ABS Global Trading Limited, Shine Effort Inc Limited, and HDR Global Services Limited were operating the exchange illegally.
