BitMEX Agrees to Pay $100M in Settlements to the CFTC of the US - Blockchain.News

BitMEX Agrees to Pay $100M in Settlements to the CFTC of the US

Godfrey Benjamin Aug 11, 2021 06:20

BitMEX has reached a settlement with the CFTC and FinCEN on charges bordering on illegal exchange operation.

BitMEX Agrees to Pay $100M in Settlements to the CFTC of the US

BitMEX has agreed to a Consent Order with the U.S. District Court for the Southern District of New York to settle charges levied by the Commodity Futures Trading Commission (CFTC) and the Financial Crimes Enforcement Network (FinCEN).

BitMex on the phone display

As revealed by the CFTC, the deal involves all the five companies that operate the BitMEX brand, and the settlement involves the payment of $100 million in a civil monetary penalty.

The charges on BitMEX in which its former founders and executives, Arthur Hayes, Benjamin Delo, and Samuel Reed, were also indicted, involves claims that the exchange allowed American residents to trade derivatives products without registering with the right agencies. The order also prohibits BitMEX from further violations of the Commodity Exchange Act (CEA) and CFTC’s regulations as charged.

“This case reinforces the expectation that the digital assets industry, as it continues to touch a broader pool of market participants, takes seriously its responsibilities in the regulated financial industry and its duties to develop and adhere to a culture of compliance,” said Acting Chairman Rostin Behnam. “The CFTC will take prompt action when activities impacting CFTC jurisdictional markets raise customer and consumer protection concerns.”

Per the press release, the Acting Director of Enforcement Vincent McGonagle noted that the deal with help reinforce the notion that “registration requirements and core consumer protections Congress established for our traditional derivatives market apply equally in the growing digital asset market.”

Authorities are particularly against the growing emergence of derivatives products in the nascent world of cryptocurrencies. Besides the claims that there are inherent risks in trading digital currencies, higher leverages have been noted to expose consumers to such risks. Exchanges are already treading on the path of caution, with outfits like Binance and FTX derivatives exchange already reducing their leverage to 20x from 125x.

The CFTC said its litigation with BitMEX is still ongoing, indicating that the settlement reached was just for the once embattled cryptocurrency exchange.

Image source: Shutterstock