BitMex Fined $100 Million In US

The US District Court for the Southern District of New York has entered a consent order against five companies charged with operating the BitMex cryptocurrency derivatives trading platform. The Order related to an action taken by the Commodity Futures Trading Commission (CFTC) in late 2020, the companies are HDR Global Trading Limited, 100x Holding Limited, ABS Global Trading Limited, Shine Effort Inc Limited, and HDR Global Services (Bermuda) Limited.

The order requires the BitMex entities to pay a $100 million civil monetary penalty, and provides that up to $50 million of the penalty may be offset by payments the BitMEX entities make or are credited pursuant to a Consent to Assessment of Civil Monetary Penalty entered by the Financial Crimes Enforcement Network (FinCen). The order also prohibits BitMex from further violations of the Commodity Exchange Act and CFTC’s regulations.

The entities and their three individual founders, Arthur Hayes, Benjamin Delo, and Samuel Reed, were charged with operating the platform while conducting significant aspects of BitMex’s business from the US and unlawfully accepting orders and funds from US customers to trade cryptocurrencies.

“This case reinforces the expectation that the digital assets industry, as it continues to touch a broader pool of market participants, takes seriously its responsibilities in the regulated financial industry and its duties to develop and adhere to a culture of compliance,” says acting CFTC chair Rostin Behnam. “The CFTC will take prompt action when activities impacting CFTC jurisdictional markets raise customer and consumer protection concerns.”

Acting director of enforcement Vincent McGonagle adds, “This action highlights that the registration requirements and core consumer protections Congress established for our traditional derivatives market apply equally in the growing digital asset market. Cryptocurrency trading platforms conducting business in the US must obtain the appropriate registration, and must implement robust Know-Your-Customer and Anti-Money Laundering procedures.”