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CFTC charges BitMex for its derivatives exchange

By Inkarias - 2020-10-04

Few day ago , the United States Commodity Futures Trading Commission, also commonly called CFTC, has charged derivatives exchange BitMEX with operating an unregistered trading platform and violating Anti-Money Laundering regulations set by the juridical framework. CFTC filed a civil enforcement action in the southern district of New York against five entities and three individuals who allegedly own and operate the exchange Bitmex. The three individuals included in this action and charged are the CEO Arthur Hayes, Ben Delo and Samuel Reed.

The charges

The US commission believes that BitMEX has illegally offered leveraged trading services to retail traders to the tune of $1 trillion in notional value since its inception in 2014. Despite its success, the CFTC believes that the exchange failed to take “the most basic compliance procedures.” These include failure to register with the commission and the lack of Know Your Customer and Anti-Money Laundering procedures. In addition to civil charges, the U.S. attorney for the District of New York indicted Hayes, Delo, Reed and Gregory Dwyer, BitMEX's head of business development, for violating and conspiring to violate the Bank Secrecy Act.

According to FBI Assistant Director William Sweeney, "One defendant went as far as to brag the company incorporated in a jurisdiction outside the U.S. because bribing regulators in that jurisdiction cost just ‘a coconut.’ Thanks to the diligent work of our agents, analysts, and partners with the CFTC, [the defendants] will soon learn the price of their alleged crimes will not be paid with tropical fruit, but rather could result in fines, restitution, and federal prison time." A statement from the Department of Justice also revealed that Reed, BitMEX's chief technology officer, was arrested on Thursday morning in Massachusetts.

However, for investor who had funds on the platform, some withdrawals have been processed during the last days.

All the details about this case can be read at https://www.cftc.gov/PressRoom/PressReleases/8270-20