BitMEX wins $100 million legal settlement with the CFTC

The end of ten months of legal proceedings? – The BitMEX platform, which specializes in crypto derivatives, has been under the vindication of the Commodity Futures Trading Commission (CFTC) since October 1, 2020. The legal jousting seems to be coming to an end, however, as the crypto exchange has agreed to pay a large fine.

BitMEX trades peace for a big check

BitMEX and its executives have been in turmoil ever since the Commodity Futures Trading Commission (CFTC) decided to shut down the unregulated Wild West that was the crypto derivatives platform.

In a press release issued on August 10, the CFTC announced that the U.S. District Court for the Southern District of New York has issued a consent order against five companies accused of operating the BitMEX platform. These companies are HDR Global Trading, 100x Holding, ABS Global Trading, Shine Effort and HDR Global Services (Bermuda).

These entities have agreed to pay a total of $100 million in civil penalties to stop the charges against them.

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A crypto industry that is increasingly compliant with regulations

The CFTC’s crackdown on BitMEX focused on its activities from November 2014 through October 2020, which offered a range of unregulated derivatives, including leveraged trading, to US-resident customers.

From the watchdog’s side, they are pleased that the compliance requirement is slowly gaining traction in the crypto-asset sector:

“This case reinforces the expectation that the digital asset industry – as it continues to reach more market participants – will take seriously its responsibilities in the regulated financial industry, as well as its duties to develop and adhere to a culture of compliance (…) “

Rostin Behnam, Acting Chairman of the CFTC

A spokesperson for BitMEX, as quoted by The Block, reiterates that this compromise and its penalty were agreed to without admitting or denying the charges. He also explains that this order does not address the charges against BitMEX executives and founders Arthur Hayes, Ben Delo and Sam Reed:

“(…) BitMEX’s co-founders (…) sought to comply with applicable law as it has developed over time. The actions taken by the U.S. authorities against Arthur, Ben and Sam are unfounded and represent an unwarranted overreach. The co-founders are eager to defend themselves in court.”

It should be remembered that while the legal battle against the CFTC ends there for BitMEX, its former executives are still awaiting trial. In fact, they had to pay millions of dollars in bail to stay free until then.

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