Crypto News

Court Hits BitMEX Co-Founders With $30M Civil Fines

The Commodity Futures Trading Commission (CFTC) announced Thursday that the District Court for the Southern District of New York (SDNY) has issued a consent order against all three founders of crypto exchange BitMEX, seeking civil penalties totaling $30 million US dollars were imposed.

The Southern District of New York earlier ordered BitMEX entities to pay $100 million for illegally operating a crypto trading platform and violating anti-money laundering (AML) regulations.

“Unlawful Acts”

According to the CFTC statement, Arthur Hayes, Benjamin Delo and Samuel Reed were each slapped with a $10 million fine. Regulators said BitMEX and its executives violated the Commodity Exchange Act (CEA) in the period from November 2014 to October 2020.

The CFTC, along with its executives, took action against BitMEX in October 2020 for conducting business in the United States without a license from the regulator. She accused the exchange of operating as a designated contract market or swap execution facility without authorization and without proper registration as a futures commission merchant. The CFTC also said BitMEX has failed to implement KYC/AML procedures for its customers.

The exchange settled the fees with CFTC and FinCEN and paid a $100 million fine. According to the court filings, the company reshuffled its executive team and also appointed a new chief compliance officer with an AML background. Other key employees were also hired following the departure of Arthur Hayes and other founders.

In a separate statement, CFTC Commissioner Caroline D. Pham said the ability to allow “unregistered companies” to operate in violation of the law “gives wrongdoers an unfair advantage over those doing the right thing” by they comply with the rules set by the regulators . She also added

“By enforcing individual accountability for registration, market conduct and anti-money laundering regulations — fundamental aspects of the U.S. regulatory framework — the CFTC ensures that BitMEX’s management, following the $100 million settlement, will comply with the defendants company being held accountable over the past year.”

Requests for no jail time and freedom to travel

The latest development follows a report showing that Hayes’ attorneys have filed a request for parole with a federal judge in Manhattan.

In a 65-page filing, the former BitMEX CEO’s legal representatives also did not ask for house arrest or community detention after signing a plea agreement that would result in a reduced prison sentence of 6 to 12 months under federal guidelines.

Source: Crypto News Deutsch

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