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BitMEX Founders Will Have To Pay $30M Civil Penalty

The three co-founders of BitMEX will have to pay huge fines for what CFTC calls their involvement in serious violations of regulations and the Commodity Exchange Act.

The US District Court for the Southern District of New York had passed the judgment where the three co-founders of BitMEX had to pay a sum of $30 million in monetary penalties, which included their former CEO Arthur Hayes.

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Benjamin Delo, Samuel Reed, and Hayes were all fined $10 million, as per a statement from the Commodity Futures Trading Commission (CFTC) at the conclusion of a court battle on Thursday in which the CFTC said they violated aspects of the Commodity Exchange Act and CFTC regulations from November 2014 to October 2020.

The CFTC Filed Suit Against The Founders Of BitMEX

The CFTC filed suit against the exchange and its three co-founders on October 1, 2020. In a rundown of the conclusion of the case today, the Commission stated that the defendants were accused of “operating the BitMEX platform while conducting significant aspects of BitMEX’s business from the U.S., and unlawfully accepting orders and funds from U.S. customers to trade cryptocurrencies,” including Bitcoin (BTC), Ether (ETH) and Litecoin (LTC) derivatives

The CFTC said unlawful acts included the operation of a facility to trade or process swaps without having CFTC approval to operate as a Designated Contract Market or a Swap Execution Facility. It said they had also operated as a Futures Commission Merchant without CFTC registration and failed to implement a Customer Information Program and Know Your Customer (KYC) procedures or an adequate Anti-Money Laundering (AML) program.

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CFTC commissioner Carline D. Pham said in a separate Thursday statement that her commission is committed to pursuing “wrongdoers with an unfair advantage” that operate in violation of the law.

Cointelegraph previously reported in February that Hayes and Delo pleaded guilty to violating the Bank Secrecy Act in a separate case filed by the U.S. Department of Justice. In the plea, they admitted to “willfully failing to establish, implement and maintain an Anti-Money Laundering (AML) program.”

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