The United District Court for New York’s Southern District has directed a cumulative amount of up to $30M to be paid on the behalf of the three co-founders of an exchange of crypto derivatives, BitMEX, taking into account Arthur Hayes (the CEO of the platform).

A fine of $10M was ordered by the court to be taken from each Samuel Reed, Benjamin Delo, and Arthur Hayes as consent payments as described in a statement made by the CFTC (Commodity Futures Trading Commission) while the denouement of a court fight took place on 5th May where it was mentioned by the court that the regulations of the CFTC were infringed by them between 2014’s November to 2020’s October. The lawsuit was submitted by the CFTC against the above-mentioned co-founders a couple of years back in October.

The accusations on BitMEX

At the finalization of the lawsuit, it was specified by the Commission that an accusation of illegally running the BitMEX venue was leveled against the defendants while carrying out important features of the U.S.-based business of BitMEX, along with illegitimately accepting funds and orders from the consumers from the United States to trade cryptocurrency, taking into account LTC (Litecoin), ETH (Ethereum), and BTC (Bitcoin) derivatives.

In the words of the CFTC, the illegal acts took into account the activities of competence to trade or the processing of swaps without acquiring a green signal from the CFTC to run as a Swap Execution Facility or Designated Contract Market. It also pointed out that they additionally did not seek registration under the CFTC and worked as a Futures Commission Merchant, and in this way, remained unsuccessful in the implementation of Know-Your-Customer and Customer Information Program measures or appropriate Anti-Money Laundering projects.

Carline D. Pham, the CFTC Commissioner, disclosed in a statement on 5th May that the commission is focused on detecting wrongdoers who take unfair advantages and breach the law. She elaborated that by the implementation of individual accountability regarding anti-money laundering, market conduct, and registration rules (included in the regulatory agenda of the United States) the commission is guaranteeing that the management of BitMEX is held accountable following the settlement of up to $100M with corporate respondents.

More legal fights

In the recent August, it was reported that BitMEX consented to recompense approximately $100M to have a settlement with the FinCEN (Financial Crimes Enforcement Center) as well as the CFTC for another case in which the FinCEN and the CFTC stated that the exchange was illegitimately operated by the runners of HDR Global Services limited, Shine Effort Inc Limited, ABS Global Trading Limited, 100x Holding Limited, and HDR Global Trading Limited.