The US court has imposed a $30 million civil monetary penalty on BitMEX co-founders Arthur Hayes, Benjamin Delo, and Samuel Reed, the US Commodity Futures Trading Commission has announced.
Each of the co-founders of the crypto derivatives trading platform is required to pay a $10 million fine.
CFTC Chairman Rostin Behnam, said:
As digital asset markets grow globally, the Commission continues to actively use its existing enforcement authority in the digital asset commodity space to protect customers and ensure these emerging markets are free from fraud and manipulation. This is another example of the Commission taking decisive action where appropriate to ensure that digital asset derivatives trading platforms comply with the Commodity Exchange Act and Commission regulations.
The CFTC filed a complaint on 1 October 2020 against the BitMEX trading platform and its co-founders for operating the business from the US without any license.
The crypto exchange offered services to US residents without approval from CFTC to operate as a Designated Contract Market (DCM) or a Swap Execution Facility (SEF). The company also operated as a Futures Commission Merchant (FCM) without registration. Moreover, it failed to implement customer information program (CIP) and know-your-customer (KYC ) procedures, as well as with anti-money laundering (AML) measures.
BitMex already settled with the regulator earlier last year and agreed to pay a $100 million penalty.
The CFTC also filed criminal charges against the exchange’s co-founders with the three of them pleading guilty.
Acting Director of Enforcement Gretchen Lowe added:
Individuals who control cryptocurrency derivatives trading platforms conducting business in the U.S. must ensure that their platform complies with applicable federal commodities laws, including CFTC registration and regulatory requirements such as Know-Your-Customer and Anti-Money Laundering regulations.
