US Authorities Have Filed Charges Against The BitMEX Crypto Exchange
The US futures trading Commission (CFTC) filed charges against the owners and operators of the BitMEX cryptocurrency exchange on Thursday, October 1. They are accused of running an unregistered trading platform and violating CFTC rules, including anti-money laundering and customer identification (KYC) measures.
BitMEX is the second largest online platform for trading cryptocurrency derivatives. Five legal entities and three individuals were charged, including the site's founder and CEO, Arthur Hayes. As noted in the CTFC statement, during its operation, THE platform received more than $11 billion in deposits in bitcoin and other digital currencies and collected commissions from clients ' transactions for more than $1 billion.
The company "illegally allowed clients to conduct retail commodity transactions with leverage, provided futures, options and swaps for cryptocurrencies, including bitcoin, ether, and Litecoin, allowing traders to use the leverage of up to 100 to 1 when entering into transactions on its platform," and the total value of transactions with derivatives is estimated in trillions of dollars, the Commission said in a statement.
At the same time, according to the authorities, the management of the exchange did not bother to obtain a license for its activities, and also "failed to implement the most basic compliance procedures required from financial institutions."
At the same time, the US Department of Justice filed charges of violating Bank secrecy against Arthur Hayes, exchange co-founders Ben Delo and Samuel Reed, and BitMEX's head of business development Greg Dwyer. Mr. Reed was arrested in Massachusetts, where he will appear in court. Others are at large.
"We allege that the four defendants, through their company-owned cryptocurrency trading platform called BitMEX, knowingly violated the Bank secrecy act by evading US anti-money laundering requirements," FBI Deputy Director William Sweeney said in a statement. All four defendants face up to five years in prison on this charge.
Against the background of this news, the bitcoin exchange rate began to decline, sinking over the past day by more than 3.5%. Now the most popular cryptocurrency is trading around $10.5 thousand.