- May 06, 2022
A US court has ordered BitMEX's founders to pay $30 million in damages for illegal trading.
Arthur Hayes, Benjamin Delo, and Samuel Reed, the three co-founders must each pay $10 million, the CFTC said.
The Commodity Futures Trading Commission (CFTC) said on Thursday that a federal judge ordered the three co-founders of BitMEX to pay a total of $30 million for operating an unauthorised bitcoin derivatives business and breaking money-laundering rules.
The platform's founders - Arthur Hayes, Benjamin Delo, and Samuel Reed – were each forced to pay a $10 million penalty by the US District Court for the Southern District of New York in connection with CFTC allegations that they illegally did business with US customers.
The ruling came after the three pleaded guilty to violations of the Bank Secrecy Act for operating the crypto spot and futures trading platform without sufficient anti-money laundering procedures in a related Department of Justice lawsuit in February.
They are still expecting punishment related to that plea "in the coming weeks,” according to the CFTC.
The firm and its founders were originally sanctioned by the US derivatives authority in 2020 for "illegally accepting orders and funds from US consumers to trade cryptocurrencies, including derivatives on bitcoin, ether, and litecoin." The CFTC lawsuit resulted in the corporation agreeing to pay the agency and the Financial Crimes Enforcement Network (FinCEN) $100 million earlier this week.
In a statement, CFTC Chairman Rostin Behnam said, "This is another example of the commission taking decisive action where necessary to ensure that digital asset derivatives trading platforms comply with the Commodity Exchange Act and Commission regulations."
These new orders "reflect the CFTC's pioneering role in bringing digital assets into the regulatory framework so that key protections for clients and market participants apply," said Caroline Pham, who was recently sworn in as one of the agency's new commissioners.
The co-founders "failed to develop and enforce appropriate measures to prevent or identify BitMEX's unlawful behaviour," according to the CFTC.
Hayes' spokesman declined to respond. Lawyers for the other co-founders could not be reached for comment right away.
BitMEX spokesman Taylor Bossung said the firm is aware of the events but won't comment on legal matters that aren't directly related to the company.
“It’s business as usual, and we're working hard to establish the BitMEX spot exchange in the coming weeks and extend the platform to better serve our customers,” Bossung said.