The Commodity Futures Trading Commission (CFTC) has hit the founders of crypto exchange BitMEX with a total of $30 million in civil monetary penalties.
US regulators lodged suits against BitMEX and its executive team in October 2020. An August 2021 settlement found that BitMEX facilitated the trading and processing of swaps without the necessary CFTC licensure. In addition to failing to register with the CFTC, that order also found the firm failed to implement sufficient anti-money laundering and know-your-customer checks.
That outcome required the firm to pay a $100 million penalty and barred it from offering derivatives products in the US.
Now, a consent order from the futures regulator requires co-founders Arthur Hayes, Benjamin Delo and Samuel Reed to each pay $10 million for violations of federal commodities laws. It also bars them from further violations of the Commodity Exchange Act and CFTC regulations.
In addition to those civil charges, there is a parallel criminal action against the co-founders. The US Attorney’s Office for the Southern District of New York indicted Hayes, Delo and Reed on charges of willfully violating the Bank Secrecy Act. All three have entered guilty pleas, and Hayes has requested probation with the ability to travel abroad ahead of his sentencing hearing.