The Commodity Futures Trading Commission has filed a lawsuit against five entities and three individuals operating the BitMEX trading platform.
BitMEX, as one of the most popular crypto exchanges, was operating an unregistered trading platform, violating several CFTC regulations. One of the most serious violations is the failure of implementing a required anti-money laundering procedure.
The CFTC announced today that it has filed a lawsuit in a U.S. court for the Southern District of New York and the case has already begun. Among the accused are the owners of the company, namely Arthur Hayes, Ben Delo, and Samuel Reed, who are operating the platform through the maze of multiple corporate entities created by them.
Namely HDR Global Trading Limited, 100x Holding Limited, ABS Global Trading Limited, Shine Effort Inc Limited, and HDR Global Services (Bermuda) Limited (BitMEX).
The report also said the platform raised more than $ 11 billion in Bitcoin deposits and earned $ 1 billion in fees alone.
Chairman Heath P. Tarbert said:
Digital assets hold great promise for our derivatives markets and for our economy,
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.
BitMEX was offering illegal and diverse trading such as futures, options, swaps on cryptocurrencies, etc. from November 2014 to the present. At the same time, the trading platform has not been able to implement even the most basic procedures given their long history in the market in order to comply with financial institutions. Not even regulating against money laundering.
According to the report, BitMEX is currently the largest cryptocurrency derivative platform in the world, with billions of dollars worth of daily trading.