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BitMEX Founder Fined $30M

 


The US District Court of Southern New York has ruled in the criminal case against former crypto derivatives trading platform BitMEX that the platform's three founders must pay a joint fine of $30 million.


Arthur Hayes, Benjamin Delo and Samuel Reed each have to pay fines of 10 million US dollars, according to an official statement from the American Trade Commission (CFTC). The plaintiff "Commodity Futures Trading Commission" had accused the three heads of the platform of having repeatedly violated American commercial law in the period from November 2014 to October 2020.

As a result, the CFTC initiated criminal proceedings against the three founders on October 1, 2020, in which the verdict was finally issued this week . Specifically, the three defendants were charged with “transacting large parts of the business from the United States during the operation of the BitMEX trading platform and unlawfully accepting trading orders and funds from American customers for the purpose of trading cryptocurrencies”, including deposits in Form of Bitcoin ( BTC ), Ether ( ETH ) and Litecoin ( LTC ).


Other related violations include the settlement of derivatives trades, such as swaps and futures, without obtaining approval from the US regulator, the CFTC. In addition, the platform is said to have failed to obtain sufficient information from customer data (KYC) and also to have taken insufficient measures with regard to combating money laundering (AML).


CFTC Commissioner Carline D. Pham stressed in a separate statement that her agency will rigorously pursue all violations of commercial law, although individuals cannot absolve their liability as individuals:


“By enforcing personal liability for violations of commercial law and anti-money laundering regulations, which are fundamental aspects of the American legal system, the CFTC makes it clear that BitMEX management will also be held personally accountable after the company already achieved a 100th anniversary last year million dollar agreement reached at the business level.”


The conviction of Arthur Hayes is of particular interest because, despite all the allegations, the former investment banker is still one of the most influential voices in the crypto industry. Hayes recently returned to the center of discussions with the daring forecast that the Bitcoin price would rise to $1 million in the next few years. Despite all professional competence, this prediction must also be treated with caution in view of the judgments that have been passed.

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