On Tuesday, the Commodity Futures Trading Commission (CFTC) has announced that the U.S. District Court had already agreed with the order to charging HDR Global Trading Limited, HDR Global Services Limited, ABS Global Trading Limited, 100x Holding Limited, and Shine Effort Inc Limited for illegally operating the BitMEX platform.
BitMEX also will pay a $100 million civil monetary penalty with the charge of “illegally operating a cryptocurrency trading platform and anti-money laundering violations”, which is part of the settlement with both the CFTC and the Financial Crimes Enforcement Network (FinCEN).
The company will be required to hire an independent consultant for the detective historical analysis of its transactions to determine that it failed to properly report suspicious activity.
“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,” said Rostin Behnam of CFTC, “The CFTC will take prompt action when activities impacting CFTC jurisdictional markets raise customer and consumer protection concerns.”
According to the announcement from CFTC, though the settlement was from the case against former CEO Arthur Hayes and other executives at BitMEX, the involved individuals are still faced charges for alleging violations of the Bank Secrecy Act.
To wit,
“BitMEX allowed customers to access its platform and conduct derivative trading without appropriate customer due diligence — collecting only an email address and failing to verify customer identity,” said FinCEN. “Despite BitMEX’s public representation that its platform was not conducting business with U.S. persons, FinCEN found that BitMEX failed to implement appropriate policies, procedures, and internal controls to screen for customers that use a virtual private network to access the trading platform and circumvent internet protocol monitoring.”
FinCEN also reported 588 instances of suspicious BitMEX activity to the government agency for more than six years and alleged the exchange did not maintain adequate
