Bitmex Founders Ordered to Pay $30M For Illegally Operating a Crypto Derivative Trading Platform and Anti-Money Laundering Violations

The founders of Bitmex were fined $30M for unlawfully running a BTC derivatives trading platform and anti-money laundering offenses, according to the court. Arthur Hayes, Samuel Reed, and Benjamin Delo all have to pay $10M.

The Founders of Bitmex Have Been Fined $30M

For running an unlawful bitcoin derivative trading platform and anti-money laundering offenses, the Southern District of New York’s District Court ordered the founders of Bitmex to pay $30M, the CFTC stated on May 5th.

Since Arthur Hayes, Benjamin Delo, and Samuel Reed are the three Bitmex co-founders, the CFTC stated that they must each pay $10 million in civil penalties and are prohibited from subsequent breaches of the CEA and CFTC rules as they charged by issuing the orders.

In October 2020, Bitmex and its three founders became the subject of a complaint by the CTFC. Bitmex was fined $100 million in August 2021 by the CFTC for violating Commodity Exchange Act and CFTC laws, according to the derivatives watchdog, which outlined the settlement.

The office of the United States Attorneys for New York’s Southern District also accused Benjamin Delo and Arthur Hayes on accusations of willfully inciting Bitmex to breach the Bank Secrecy Act and conspiracy to conduct that same violation, the CFTC added. Arthur Hayes, Samuel Reed, and Benjamin Delo have pleaded guilty to one of the indictments against them. According to the derivatives regulator, the three defendants will be punished within the next several weeks.

The Case Overview for Bitmex 

The co-founders Samuel Reed, Benjamin Delo, and Arthur Hayes each managed Bitmex between November 2014 and October 1st, 2020, according to the consent orders, which hold them accountable for Bitmex’s alleged breaches of the Commodity Exchange Act and Commodity Futures Trading Commission laws because they failed to create and maintain appropriate measures to prevent or identify the illegal behavior of Bitmex.

The court’s order from August 10th last year says that Bitmex broke the law by running a place to trade or process swaps without permission from the CFTC to do so as a DCM or a SEF. To add to their woes, Bitmex didn’t register with the CFTC, did not have proper KYC/AML processes, and did not have a CIP. Those are just a few of the issues that Bitmex had to deal with.

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