A group of companies that manage the cryptocurrency exchange BitMEX will pay $100 million (~£72 million) to settle a conflict with the authorities. They are accused of allowing illegal trading in digital assets and violating anti-money laundering rules.
The exchange is accused of allowing US residents to trade cryptocurrency derivatives between November 2014 and October 2020. It is also accused of failing to comply with bank secrecy rules and ignoring warnings from US authorities to report any suspicious transactions.
BitMex used to be considered one of the largest crypto derivatives exchanges, but its position was hit hard when the CFTC filed a lawsuit against it last October and triggered an investigation. The case prompted a series of probes, which has also been applied to other related platforms.
According to the signed agreement, BitMEX will pay $50 million (~£36 million) to the CFTC, as well as provide a loan of the same amount for payments made as part of the Financial Crimes Enforcement Network (FinCEN) activities. In addition, the exchange is obliged to officially block access to its services for US citizens.
BitMEX chief executive Alexander Hoptner said the company is pleased to cooperate with the authorities. He also added that the platform has significantly improved its compliance programme in recent years.
The resolution does not concern BitMEX founders; the former CEO Arthur Hayes, Benjamin Delo and Samuel Reed. They have claimed innocence for violating the Bank Secrecy Act, which they are accused of by the Ministry of Justice. They confirmed on Tuesday that they intend to deny the government’s accusations.
Arthur Hayes was once deemed one of the crypto industry’s top promoters. In 2018, he rented three Lamborghinis and left them in a Manhattan car park near where the Bitcoin (BTC) conference was taking place. This publicity stunt made a lasting impression on attendees.
In addition to BitMEX, other companies implicated in yesterday’s agreement included HDR Global Trading, 100x Holdings, ABS Global Trading, Shine Effort and HDR Global Services (Bermuda). All have neither admitted nor denied the allegations made against them by regulators.
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The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
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