BitMEX Ceases All Marketing and Trading Operations in the US as Part of $100M Settlement with CFTC and FinCEN

While investigations into the three founders are still ongoing, BitMEX is seeking a license in several jurisdictions and claims to have a 100% KYC’d user base, which it says is needed to achieve mainstream adoption.

Cryptocurrency exchange BitMEX has agreed to pay $100 million to settle allegations that it allowed illegal trades and violated anti-money laundering rules.

A complaint was filed last October where the CFTC alleged the exchange and its three founders operated the exchange and allowed US investors to trade crypto on it for at least six years without regulatory clearance. Meanwhile, Financial Crimes Enforcement Network (FinCEN) alleged it didn’t maintain necessary anti-money laundering rules and conducted at least $209 million of transactions with known darknet markets. BitMEX said,

“We’re happy to confirm that we’ve reached a resolution with the United States CFTC and FinCEN. This marks a new chapter for BitMEX. It also marks a new era for crypto.”

The platform broke regulations by letting U.S. residents trade cryptocurrency derivatives from at least November 2014 through October 2020, said the Commodity Futures Trading Commission (CFTC) in a statement this week. CFTC Acting Chair Rostin Behnam said,

“This case reinforces the expectation that the digital assets industry, as it continues to touch a broader pool of market participants, takes seriously its responsibilities in the regulated financial industry and its duties to develop and adhere to a culture of compliance.”

The platform also settled claims from the FinCEN for not adhering to the Bank Secrecy Act and failing to report suspicious transactions to authorities.

Investigations into the three founders, Arthur Hayes, Benjamin Delo, and Samuel Reed, are still ongoing, but the exchange has ceased all marketing and trading operations in the US as of June 30, the CFTC said.

BitMEX CEO Alexander Höptner, who is not under investigation, said in a statement that the company is “very glad to put this behind” it and pledged to “actively engage with regulators around the world… to shape the future of this extraordinary asset class.”

On Tuesday, the exchange said they are currently seeking a license in several jurisdictions and claimed to have a 100% KYC’d user base. BitMEX said,

“To achieve mainstream adoption, the industry needs to be trusted. And trust must be earned through comprehensive KYC, compliance, and robust AML.”

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