The three co-founders will pay hefty fines for serious violations of the CFTC’s regulations and the Commodity Exchange Act.
The United States District Court for the Southern District of New York has fined three co-founders of the BitMEX crypto derivatives exchange, including former CEO Arthur Hayes, totaling $30 million.
The Commodity Futures Trading Commission said in Thursday’s court that they had violated the Commodity Exchange. According to the statement, Hayes, Benjamin Delo and Samuel Reed were fined $10 million.
On October 1, 2020, the CFTC sued the exchange and its three co-founders. The commission stated that the defendants were charged with “operating the BitMEX platform while executing key aspects of BitMEX.”
The CFTC said that illegal acts operate a facility to trade barter without CFTC approval to operate as a Designated Contract Market or a Clearing Enforcement Facility. He also said that they were operating as a Futures Commission Trader without CFTC registration and were unable to implement the Customer Information Program and Know Your Customer (KYC) procedures or an adequate Anti-Money Laundering (AML) program.
CFTC commissioner Carline D. Pham said on Thursday that her commission is committed to pursuing “wrongs with an unfair advantage” that violate the law.
By enforcing individual accountability for registration, market behavior and anti-money laundering rules, which are key aspects of the US regulatory framework, the CFTC ensures that BitMEX management is held accountable following a $100 million settlement last year with corporate defendants.
In February, Hayes and Delo were found guilty of violating the Bank Secrecy Act in a lawsuit filed by the US Department of Justice. In the defense, they admitted that they “failed to establish, implement and maintain an Anti-Money Laundering (AML) program.”
Bloomberg reported Thursday that Hayes’ mother is particularly concerned about how the federal judge presiding over the DOJ trial will punish her son. The defense offered the woman a letter requesting a light sentence, and her lawyers requested probation without house arrest or community arrest.
Last August, BitMEX agreed to make a $100 million consent payment to both the CFTC and the Financial Crimes Enforcement Center (FinCEN) to settle a separate lawsuit, which the CFTC and FinCEN call exchange operators HDR Global Trading Limited, 100x Holding. reported. Limited, ABS Global Trading Limited, Shine Effort Inc Limited, and HDR Global Services Limited operated the exchange illegally.
BitMEX Founders To Pay $30 Million Fine