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United States Futures Trading Commission (CFTC) filed a claim against cryptocurrency derivatives exchange BitMEX and its owners, including co-founder and CEO Arthur Hayes. They are accused of running an unregistered trading platform and violating CFTC rules, including anti-money laundering and customer identification (KYC) measures.
In addition to Hayes, BitMEX co-founders Ben Delo and Samuel Reed, parent companies of HDR Global Trading Limited and 100x Holdings Limited, as well as ABS Global Trading Limited, Shine Effort Inc Limited and HDR Global Services (Bermuda) are named as defendants.
Enf Hdr Global Trading Complaint 100120 by ForkLog on Scribd
Additionally, the US Department of Justice has indicted Hayes, Cause, Reed and BitMEX’s head of business development Greg Dwyer for violating the US Bank Secrecy Act.
Reed (CTO) was arrested this morning in Massachusetts, where he will stand trial, officials said. Hayes, Delo and Dwyer remain at large for now.
“We claim that the four defendants, through their company’s cryptocurrency trading platform BitMEX, knowingly violated the Bank Secrecy Act by evading US anti-money laundering requirements,” FBI Deputy Director William Sweeney said in a statement.
Lawyer Jake Chervinski believes that the US Justice Department’s accusation deserves the most attention. The maximum sentence for Hayes and his business partners on the charges is 5 years in prison.
???? The CFTC just charged BitMEX with illegally operating a derivatives trading platform.
But the *much* bigger news: USAO-SDNY has indicted Arthur Hayes & colleagues on criminal charges for Bank Secrecy Act violations. Maximum penalty: 5 years in prison.https://t.co/hSmaC54S5b
— Jake Chervinsky (@jchervinsky) October 1, 2020
BitMEX disagrees with the prosecution and is ready to defend their interests in court. The exchange claims to have always complied with US laws in accordance with instructions from regulators.
In response to the U.S. CFTC and DOJ filings, we’ve posted a statement on our blog: https://t.co/TCmF7IvMmn
– BitMEX (@BitMEX) October 1, 2020
Against the backdrop of these events, the bitcoin price dropped sharply to around $ 10,500.
Source: graph BTC / USD Bitstamp exchange by TradingView.
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Despite the situation, BitMEX processed withdrawals normally at 17:45 UTC. The exchange promised to carry out the next withdrawals at 8:00 and 13:00 UTC (October 2).
Can confirm: https://t.co/J8BSWJac2j
– Sergej Kotliar (@ziggamon) October 1, 2020
Pretty impressed tbh. Took some risk off MEX, but not all. Still want to make money.
— Crypto_C (@Cryptoc_XBT) October 1, 2020
According to Glassnode’s calculations, there are 170 thousand BTC in BitMEX accounts.
According to our data, around 170,000 $ BTC (~$1.8 billion USD) are being held in #BitMEX wallets.
That’s almost 1% of the circulating #Bitcoin supply.https://t.co/avHmJDN1b2 pic.twitter.com/sf6ahcaUUf
— glassnode (@glassnode) October 1, 2020
As a reminder, in May, The Bitcoin Manipulation Abatement LLC (BMA) filed on BitMEX to court, accusing the exchange of conducting illegal activities in the United States, manipulating the cryptocurrency market, fraud, unfair business practices, money laundering and illegal management of raised funds.
In August BitMEX introduced new verification rules, according to which users must confirm their residential address and provide identity documents. The innovations do not apply to corporate clients.
Formerly the parent company of the exchange underwent restructuring, as a result of which the company 100x Group was created to manage the exchange. Then the company noted that their plans go far beyond BitMEX.
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