Crypto Exchange BitMex to Pay $ 100 Million to Resolve Illegal Trade Complaints and Anti-Money Laundering Violations

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Top line

Cryptocurrency exchange BitMex, one of the world’s largest trading platforms for crypto derivatives, said on Tuesday it would pay a $ 100 million fine to settle civil charges with Commodities Futures Trading Commission and the Financial Crimes Enforcement Network, which will result in one of the biggest settlements on record against a cryptocurrency exchange as regulators step up enforcement of the nascent industry.

The settlement marks one of the biggest penalties ever imposed on a cryptocurrency exchange.

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The ruling ends a year-long investigation by regulators into BitMex for allegedly illegally operating a cryptocurrency trading platform and violating anti-money laundering laws, FinCEN reported on Tuesday afternoon.

In its complaint filed last October, the CFTC alleged that BitMex and its three co-founders have operated the exchange from the United States for at least six years and illegally accepted orders and funds from American investors to trade crypto. currencies without the authorization of the regulator.

Meanwhile, FinCEN alleges that the exchange failed to maintain necessary anti-money laundering protocols and made at least $ 209 million in transactions with known darknet markets or unregistered money services firms. providing mixing services.

Investigations into the three co-founders are ongoing, but as of June 30, BitMex has ceased all marketing and trading operations in the United States, the CFTC said.

In a statement, BitMex CEO Alexander Hptner, who is not under investigation, said the company was “very happy to put this behind” and is committed to “actively engage with regulators around the world… to shape the future of this extraordinary asset “. to classify.”

Tuesday’s settlement marks the biggest fine against a cryptocurrency exchange since FinCEN fined BTC-e $ 110 million in 2017, alleging that the now-defunct exchange has facilitated sales of ransomware and drugs on the darknet for a period of three years at the start of the decade.

Crucial quote

This case reinforces the expectation that the digital asset industry, as it continues to reach out to a larger pool of market participants, will take seriously its responsibilities in the regulated financial sector and its duties to develop and adhere to a culture of compliance, said Rostin Behnam, acting chairman of the CFTC. said in a statement Tuesday.

Key context

The settlement with BitMex comes as regulators and lawmakers seek to strengthen oversight of the burgeoning cryptocurrency space. In the last week alone, the Securities and Exchange Commission fined cryptocurrency firm Poloniex $ 10 million for operating an unregistered exchange and announced its first case involving the decentralized financial space based on the blockchain, accusing two men from Florida and their Cayman Islands company of allegedly raising $ 30 million in an unregistered bid. SEC Chairman Gary Gensler last week called on Congress to strengthen its authority over cryptocurrencies and compared the industry to the Wild West. BitMex isn’t alone among exchanges facing a recent review, either. The Justice Department and the Internal Revenue Service reportedly opened an investigation into the Binance cryptocurrency exchange earlier this year for potential money laundering.

Large number

$ 2.5 billion. That’s roughly how many U.S. regulators have fined the cryptocurrency industry since bitcoin’s inception in 2009, according to an analysis by blockchain analyst firm Elliptic in June.

Further reading

SEC accuses crypto executives of allegedly fraudulent $ 30 million offers in first case against booming $ 100 billion space (Forbes)

Over $ 600 Million Stolen From Ethereum And Other Cryptocurrencies, Marking One Of Biggest Crypto Hacks (Forbes)

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