CFTC aims to promote integrity and resilience
The Commodity Futures Trading Commission (CFTC) ordered the three co-founders to pay hefty fines totaling $30 million for their role in “serious regulatory and Commodity Exchange Act violations” from November 2014 to October 2020. According to The CFTC, The This decision aligns with its mission to promote the integrity, resilience, and vibrancy of the U.S. derivatives markets through sound regulation.
The Commission stated that BitMEX’s illegal acts include:
- Operating a facility to process swaps without CFTC approval to operate as a designated contracts market or swap execution facility.
- Operate as a futures commission merchant without obtaining a license from the CFTC
- Failure to implement a customer information program and know-your-customer procedures
- Failing to implement a satisfactory anti-money laundering program.
The case, filed against BitMEX and its co-founders on October 1, 2020, underscored the need for crypto derivatives platforms to comply with the Commodities Exchange Act and Commission regulations.
Commissioner Johnson’s statements regarding the consent order highlighted the importance of innovations in merged digital asset markets to remain competitive in global financial markets. However, he thinks it is equally important to balance these innovations with fundamental principles such as consumer protection, transparency and fairness.
BitMEX in serious trouble
On August 10, 2021, SDNY ordered BitMEX to pay $100 million for illegally operating a crypto-trading service and violating anti-money laundering (AML) regulations.
In a separate lawsuit filed by the DOJ, Hayes and Delo pleaded guilty to violating the bank secrecy law. According to the plea, they admitted to “willfully neglecting to establish, implement and maintain an anti-money laundering (AML) program,” according to the plea. Bloomberg reported that Hayes’ mother was very worried about how the federal judge handling the DOJ case would punish her son.