Crypto trading platform BitMEX is paying US$100 million to resolve allegations that it violated U.S. derivatives and banking rules.
Five companies that operated the BitMEX crypto platform reached a joint deal with the U.S. Commodity Futures Trading Commission (CFTC) and the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) that will see the companies pay a combined US$100 million to resolve regulatory allegations.
Last October, the CFTC filed an action against the BitMEX companies and their founders, alleging that they enabled U.S. investors to trade cryptocurrencies, including derivatives on Bitcoin, Ether, and Litecoin, without registering. It also alleged that the firms failed to adopt adequate KYC procedures and an adequate anti-money-laundering (AML) program.
FinCEN sanctioned the firm for violations of the Bank Secrecy Act (BSA) and related regulations stemming from its inadequate KYC and AML programs.
“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 CFTC Chairman Rostin Behnam in a statement.
The CFTC noted that its order recognizes that BitMEX has engaged in remedial measures, including developing an AML and user verification program, and blocking access to U.S.-based investors.
In a statement, BitMEX CEO Alexander Höptner said: “Today marks an important day in our company’s history, and we are very glad to put this behind us. As crypto matures and enters a new era, we too have evolved into the largest crypto derivatives platform with a fully verified user base. Comprehensive user verification, robust compliance, and anti-money laundering capabilities are not only hallmarks of our business — they are drivers of our long-term success.”
Höptner added that BitMEX takes its responsibilities “extremely seriously” and will continue to engage with regulators around the world.
The CFTC noted that related criminal charges that were filed against four individuals last year by the U.S. Attorney’s Office for the Southern District of New York remain outstanding, and that the defendants have all entered not guilty pleas.
A statement from BitMEX co-founders Arthur Hayes, Ben Delo and Sam Reed noted they were not party to Tuesday’s settlements.
“As their defense will show, from the company’s earliest days, the co-founders sought to comply with applicable law as it developed over time,” a spokesperson said in a statement.