Crypto Trading Platform BitMEX ‘Attempted to Evade’ US Regulations, CFTC Charges

The U.S. Commodity Futures Trading Commission alleged crypto trading platform BitMEX facilitated unregistered trading and other violations.

The CFTC announced Thursday it was charging BitMEX, CEO Arthur Hayes, company owners Ben Delo and Samual Reed, and corporate entities HDR Global Trading Limited, 100x Holding Limited, ABS Global Trading Limited, Shine Effort Inc Limited and HDR Global Services (Bermuda) Limited with offering U.S. customers illicit crypto derivative trading services.

In a press release, the CFTC alleged that BitMEX received some $11 billion in bitcoin deposits and made more than $1 billion in fees, “while conducting significant aspects of its business from the U.S. and accepting orders and funds from U.S. customers.”

The CFTC charged BitMEX with executing futures transactions on an unregistered board, offering illegal options, failing to register as a futures commission merchant, failing to register as a designated contract market, failing to implement proper know-your-customer rules and other counts.

BitMEX, which has reportedly been under investigation by the CFTC since at least July 2019, implemented mandatory KYC in April of this year.

“As a derivatives market regulator that supports innovation and ingenuity, it is imperative that we actively police trading platform activity and remove the bad apples so that legitimate, law-abiding marketplaces can flourish,” said CFTC Commissioner Brian Quintenz in a statement. “We will not stand for any participant brazenly flouting our rules. I look forward to the successful resolution of this matter and the beneficial impact it will have in this market by holding those who deliberately ignore the law accountable.”