Court orders BitMEX founders to pay $30M civil penalty


The U.S. District Court for the Southern District of New York has ordered a total of $30 million civil monetary penalties from the three co-founders of BitMEX crypto derivatives exchange, including former CEO Arthur Hayes.

Hayes, Benjamin Delo, and Samuel Reed were each fined $10 million in consent payments according to a statement from the Commodity Futures Trading Commission (CFTC) at the conclusion of a court battle on May 5 in which the CFTC said they violated aspects of the Commodity Exchange Act and CFTC regulations from November 2014 to October 2020.

How To Get Free Crypto  

The CFTC filed suit against the exchange and its three co-founders on Oct. 1, 2020. In a rundown of the conclusion of the case today, the Commission stated that the defendants were accused of “operating the BitMEX platform while conducting significant aspects of BitMEX’s business from the U.S., and unlawfully accepting orders and funds from U.S. customers to trade cryptocurrencies,” including Bitcoin (BTC), Ether (ETH), and Litecoin (LTC) derivatives.

The CFTC said unlawful acts included the operation of a facility to trade or process swaps without having CFTC approval to operate as a Designated Contract Market or a Swap Execution Facility. It said they had also operated as a Futures Commission Merchant without CFTC registration, failed to implement a Customer Information Program and Know-Your-Customer procedures or an adequate Anti-Money Laundering program.

CFTC Commissioner Carline D. Pham said in a separate May 5 statement that her Commission is committed to pursuing “wrongdoers with an unfair advantage” that operate in violation of the law.

“By enforcing individual accountability for registration, market conduct, and anti-money laundering rules—fundamental aspects of the U.S. regulatory framework—the CFTC is ensuring that BitMEX’s management is held responsible after last year’s $100 million dollar settlement with corporate defendants.”

Additional legal battles

According to reporting from Cointelegraph in February, Hayes and Delo pleaded guilty to violating the Bank Secrecy Act in a separate case filed by the DOJ. In the plea, they admitted to “willfully failing to establish, implement and maintain an Anti-Money Laundering (AML) program.”

Coinbase Banner  

Bloomberg reported on May 5 that Hayes’s mother was particularly concerned with how the federal judge presiding over the DOJ’s case would sentence her son. The defense offered a letter from her asking for a lenient sentence, and his lawyers requested a sentence of probation without house arrest or community confinement.

Related: Dfinity Foundation files lawsuit against Meta over infinity logo

Last August, Cointelegraph reported that BitMEX agreed to pay $100 million in consent payments to both the CFTC and the Financial Crimes Enforcement Center (FinCEN) in order to resolve a separate case where the CFTC and FinCEN said exchange operators HDR Global Trading Limited, 100x Holding Limited, ABS Global Trading Limited, Shine Effort Inc Limited and HDR Global Services Limited illegally operated the exchange.

Go to Source
Author: Brian Newar

Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.