Law enforcement Oct 08, 2020

BitMEX Crypto Exchange Co-Founders Face Charges for Failing to Implement U.S. Compliance Procedures

The top executives of BitMEX have been charged according to U.S. anti-money…

The top leaders of major crypto exchange BitMEX have faced court charges on allegations of failing to adhere to the directives outlined by the U.S. anti-money laundering rules.

The U.S. Bank Secrecy Act provides that financial entities operating in the U.S. must actively report on all currency transactions and customer relationships as a possible prophylaxis against money laundering schemes.

Charges relating to the Act carry a maximum sentence of five years in prison.

According to a press release by the Commodity Futures Trading Commission (CFTC), the federal regulatory body filed a civil enforcement action in New York’s Southern District court against three of the crypto trading platform’s top executives, including five entities.

The charged persons include Arthur Hayes, Ben Delo and Samuel Reed, who have reportedly been operating BitMEX via a dense network of corporate outfits. The five companies that have been mentioned as defendants in the complaint include HDR Global Trading Limited, 100x Holding Limited, ABS Global Trading Limited, Shine Effort Inc Limited and HDR Global Serrvices (Bermuda) Limited (BitMEX).

The U.S. Department of Justice (DOJ) reported that BitMEX failed to meet its obligations of meeting basic compliance procedures, including the requirement to seek regulatory approval before operating a financial trading facility.

It turns out that the crypto trading platform received $11 billion in digital currency deposits and gained more than $1 billion in transaction fees while receiving orders and money from people in the U.S.

According to the CoinMarketCap list of top crypto derivates exchanges, BitMEX is the third largest outfit right behind OKEx and Binance – it holds about $2 billion worth of Bitcoin.

News concerning the BitMEX U.S. regulation saga affected the crypto industry adversely. Apart from the fact that the total crypto-market capitalization lost approximately $13 billion, BitMEX lost its previously-held second position to OKEx.



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