Bitmex, once the leading crypto derivatives exchange, will see its three co-founders paying a $10 million penalty each to settle charges with the Commodity Futures Trading Commission (CFTC).
According to a statement by the CFTC, Arthur Hayes, Benjamin Delo and Samuel Read must each forfeit $10 million in a civil monetary penalty for “illegally operating a cryptocurrency derivatives platform and anti-money laundering violations.
This past February, the US Department of Justice announced that Hayes and Delo pleaded guilty to charges of violating the Bank Secrecy Act while consenting to a $10 million penalty each.
CFTC Chairman Rostin Behnam, commented on the decision:
“As digital asset markets grow globally, the Commission continues to actively use its existing enforcement authority in the digital asset commodity space to protect customers and ensure these emerging markets are free from fraud and manipulation. This is another example of the Commission taking decisive action where appropriate to ensure that digital asset derivatives trading platforms comply with the Commodity Exchange Act and Commission regulations.”
The settlement stems from a CFTC complaint filed on October 1, 2020, against the entities operating the BitMEX trading platform and their three founders.
The complaint charged the entities and their founders with 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 derivatives on Bitcoin, Ether, and Litecoin.
The CFTC resolved the action against the BitMEX entities through a consent order entered on August 10, 2021, that incorporated a $100 million civil monetary penalty and injunctions against future violations of the CEA and CFTC regulations.
BitMEX has since been re-animated under new leadership, pursuing compliant crypto asset derivatives trading as well as a future spot exchange.