BitMEX co-founders Arthur Hayes, Benjamin Delo and Samuel Reed have been ordered to pay $10 million each in civil monetary penalties by a US District Court for operating the cryptocurrency and derivatives platform illegally.
The penalties relate to accusations from October 2020 that found that from at least the end of 2014, the platform’s operating entities and founders conducted business with US customers illegally by unlawfully accepting orders and funds from them to trade cryptocurrencies including derivatives on bitcoin, ether and Litecoin.
Other charges include operating a facility to trade or process swaps without having approval from the US’ CFTC to operate as a Designated Contract Markets (DCM) or a Swap Execution Facility (SEF).
BitMEX is also accused of having operated as a Futures Commission Merchant (FCM) without registration from the regulator, failing to implement a Customer Information Program (CIP) and Know-Your-Customer (KYC) procedures, and failing to implement a Anti-Money Laundering (AML) program deemed adequate by the regulator.
The CFTC resolved the action against the BitMEX entities through a consent order from August last year that incorporated a $100 million civil monetary penalty.
“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,” said CFTC chairman Rostin Behnam.
“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.”