The US District Court for the Southern District of New York ordered the platform’s founders to each pay a USD 10 million penalty in connection with Commodity Futures Trading Commission (CFTC) accusations that they illegally conducted business with US customers. The order followed the February 2022 resolution of a related Department of Justice case in which the three pleaded guilty to violations of the Bank Secrecy Act for running the crypto spot and derivatives trading platform without proper controls against money laundering.
Related to that plea, they are still awaiting sentencing ‘in the upcoming weeks’, according to the CFTC. In 2020, the US derivatives regulator first sanctioned the company and its founders for ‘unlawfully accepting orders and funds from US customers to trade cryptocurrencies, including derivatives on Bitcoin, Ether, and Litecoin’. The penalties mentioned at the beginning stem from that CFTC action, in which the company had previously agreed to pay the agency and the Financial Crimes Enforcement Network (FinCEN) USD 100 million.
One of the CFTC’s new commissioners said these latest orders ‘highlight the CFTC’s role in bringing digital assets within the regulatory perimeter so that important protections for customers and market participants apply’.
The CFTC said the co-founders ‘failed to implement and enforce effective controls to prevent or detect BitMEX’s unlawful conduct’. A BitMEX spokesman said the company is aware of the developments but won’t comment on legal matters the company isn’t directly involved with.
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