U.S Commodity Futures Trading Commission (CFTC) filed a civil enforcement action against crypto exchange BitMEX’s co-founders Arthur Hayes, Ben Delo, and Samuel Reed and accused them of operating an “unregistered trading platform” and for violating CFTC regulations which includes breaking the anti-money laundering rules, according to a 40-page complaint published by the CFTC today.
According to the CFTC, the charges levied on BitMEX were a result of the firm allegedly operating without having CFTC approval to function as a designated contract market or swap execution facility, a futures commission merchant.
Chairman of the CFTC, Heath P. Tarbert, stated:
For the United States to be a global leader in this space, it is imperative that we root out illegal activity like that alleged in this case. New and innovative financial products can flourish only if there is market integrity. We can’t allow bad actors that break the law to gain an advantage over exchanges that are doing the right thing by complying with our rules.
The complaint further charged BitMEX with violating CFTC rules by “failing to implement know-your-customer procedures,” and a customer information program, and anti-money laundering procedures.
The complaint also mentioned BitMEX’s parent company, HDR Global Trading Limited, and other firms such as 100x Holdings Limited, ABS Global Trading Limited, Shine Effort Inc Limited and HDR Global Services (Bermuda) Limited as defendants.
According to the complaint:
BitMEX has profited while illegally offering leveraged retail commodity transactions, futures, options and swaps; operating as an unregistered futures commission merchant (“FCM”); and operating a facility for the trading of swaps without being registered as a swap execution facility (“SEF”) or as a designated contract market (“DCM”). Therefore, the CFTC brings this action against Defendants, the owners and operators of the BitMEX virtual currency derivatives trading platform..
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