Bitmex to pay $ 100 million to settle compliance claims – The Royal Gazette

[ad_1]

Updated: August 10, 2021 at 7:48 PM

BitMEX chief executive Arthur Hayes is shown with then National Security Minister Wayne Caines, left, and David Burt, the Prime Minister, in 2018.

A group of companies that operated the BitMEX crypto exchange will pay $ 100 million to settle allegations that they authorized years of illegal transactions and violated anti-money laundering rules, solving one of the First big cases of a new U.S. crackdown on digital tokens, Bloomberg reported.

BitMEX broke the regulations by allowing U.S. residents to trade cryptocurrency derivatives from at least November 2014 through October 2020, the Commodity Futures Trading Commission said today in a statement. The backers of the trading platforms also settled claims by the Financial Crimes Enforcement Network that they did not adhere to the Bank Secrecy Act and failed to report suspicious transactions to US authorities.

BitMex was once the world’s largest crypto-derivatives exchange, but its outlook has deteriorated amid U.S. investigations, which peaked last October when the CFTC filed a complaint, Blomberg said.

The futures regulator has since launched investigations on other platforms on similar suspicions that they allow Americans to buy and sell derivatives without registering with the agency.

The deal requires BitMEX companies to pay the CFTC $ 50 million, and credit up to $ 50 million for payments made under a related deal with FinCEN.

BitMEX has also certified that anyone based in the United States is prohibited from accessing its trading platform.

BitMEX said in a statement that it has improved its compliance program in recent years and is happy to put the investigations behind the company.

We take our responsibilities very seriously and will continue to actively engage with regulators around the world to ensure we play a positive role in helping to shape the future of this extraordinary asset class, said Chief Executive Officer Alexander Hoptner in the press release.

The resolution does not involve Arthur Hayes, Benjamin Delo and Samuel Reed, the three men who founded BitMEX. All have pleaded not guilty in a separate Justice Ministry case that accuses them of breaking bank secrecy law.

Gregory Dwyer, a senior BitMEX executive, faces extradition from Bermuda to the United States on money laundering charges.

Mr Dwyer was charged on October 1 last year with breaking US bank secrecy law and conspiring to break bank secrecy law.

Mr Dwyer, 38, will return to the Magistrates’ Court on August 25 for an extradition hearing before Magistrate Khamisi Tokunbo.

BitMEX was launched in 2014 as a cryptocurrency derivatives trading platform, which allows traders to earn money from the performance of digital currencies.

Two of its associated companies are registered in Bermuda.

They were formed after Mr. Hayes visited Bermuda in June 2018 and met with David Burt and Wayne Caines, then Minister of National Security who was leading the government’s fintech initiative.

The Prime Minister tweeted photos from the meeting and wrote that Mr Hayes had met with our #fintech team to learn more about our regulation of digital assets, with a view to establishing a Bitmex office in Bermuda.

HDR Global Services (Bermuda) Ltd was incorporated here as an exempt software technology development company shortly thereafter on July 3, 2018.

HDR Capital Ltd, an investment holding company, was incorporated as an exempt company here on April 5, 2019.

A spokesperson for Hayes, Delo and Reed reiterated on Tuesday that they intended to fight the government’s claims.

As their defense will show, from the company’s early days, the co-founders have sought to comply with applicable law as it has developed over time, the spokesperson said in a statement.

Hayes, a former stock trader at Citigroup Inc., was once considered a major promoter of the crypto industry.

In 2018, BitMEX hired three Lamborghinis to park in front of a Bitcoin conference in Manhattan, with Hayes saying the stunt was a success because of all the publicity it generated.

Companies involved in Tuesday’s deal included HDR Global Trading Ltd., 100x Holdings Ltd., ABS Global Trading Ltd., Shine Effort Inc., and HDR Global Services (Bermuda) Inc.

The companies neither admitted nor denied the allegations.

The case is Commodity Futures Trading Commission v. HDR Global Trading Ltd., 20-cv-08132, US District Court, Southern District of New York (Manhattan)

[ad_2]