BitMex Founders Fined $30 Million

The ongoing saga of the US regulators’ chase after the three co-founders of BitMex has seen a US District Court enter Consent Orders against Arthur Hayes, Benjamin Delo and Samuel Reed for $10 million each. The Orders were brought by the UA Commodity Futures Trading Commission (CFTC) for breaches of the Commodity Exchange Act (CEA) and other CFTC regulations.

The orders stem from a CFTC complaint filed on October 1, 2020 against the entities operating the BitexX trading platform and their three founders, which charged them with operating the BitMex platform while conducting significant aspects of BitMex’s business from the US and unlawfully accepting orders and funds from US customers to trade cryptocurrencies. The CFTC resolved the action against the BitMex entities through a consent order entered on August 10, 2021, that incorporated a $100 million civil monetary penalty and injunctions against future violations of the CEA and CFTC regulations.

“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,” says CFTC chair Rostin Behnam. “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.”

Acting director of enforcement, Gretchen Lowe, adds, “Individuals who control cryptocurrency derivatives trading platforms conducting business in the US 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.”