CFTC Files Case Against BitMEX
Five companies and three individuals are alleged to have owned and operated the BitMex trading platform, violating multiple CFTC rules by using an unregistered trading platform, the U.S. said in the U.S. Southern District. Limitations, including failure to implement required money laundering policies.
The list of individuals includes Aurthur Hayes along with co-founders Ben Delo, and Samuel Reid are subsequently accused of operating an unregistered trading platform and violating CFTC rules, including anti-money laundering and restrictions on custom controls.
Further, the companies that were part of these violations are HDR Global Trading Limited, 100x Holding Limited, ABS Global Trading Limited, Shine Effort Inc Limited, and HDR Global Services (Bermuda) Limited (BitMEX).
The complaint charges subsequently accused BitMEX of operating a facility under the hand that was trading and swapping the digital currency without and CFTC approvals as such via swap facility execution system and then soliciting orders for requests and then accepting Bitcoins as being themselves from the counterparty.
The firm is also being accused of not implementing the know-your-customer procedure which is subsequently an informative program targeting the customers to explain them anti-money laundering procedures; thus this was also counted as a violation of CFTC rules.
Although CFTC requests the public to verify company registration with the Commission before funding, if not registered, the customer must be careful when funding the company. The registration status of the company can be viewed using NFA Basic.
Furthermore, another criminal charge sheet is made against Authur Hayes, Delo, Reed, and Head of business development Greg Dwyer by The Department of Justice for violating the Bank Secrecy Act.
The next day Reed was arrested from in Massachusetts and will soon be presented in that area federal court.
In a recent statement by FBI assistant director William Sweeney, he said that:
“All the four accused were contributing to this violating act willfully under the name of there crypto exchange and trading platform BitMEX thus evading the U.S anti-money laundering requirements. Although Digital assets offer great promise to our derivative markets and economy,”
CFTC Chairman Heath Tarbert said in a statement. “For the United States to grow as a world leader in the region, it is imperative that we isolate the illegal activities alleged in this case. New and innovative financial products can only thrive if there is market integrity. We can not allow bad actors to break the law to profit from the right working exchanges by following our rules.
The Division of Enforcement staff members responsible for this case is Joy McCormack, Carlin Metzger, Jeffrey Gomberg, Joseph Platt, Ray Lavko, Brigitte Weyls, Elizabeth N. Pendleton, Scott Williamson, and Robert T. Howell. Staff from the Division of Market Oversight, Division of Clearing and Risk, and Division of Swap Dealer and Intermediary Oversight also assisted in this matter.
