Seychelles based cryptocurrency exchange and derivatives trading platform, BitMEX has inked a settlement with the United States Commodity Futures Trading Commission (CFTC) as announced by the regulator on Tuesday.
According to the issued Press Release, the group of companies operating the BitMEX exchange including HDR Global Trading Limited, 100x Holding Limited, ABS Global Trading Limited, Shine Effort Inc Limited, and HDR Global Services (Bermuda) Limited. have collectively entered a Consent Order with the U.S. District Court for the Southern District of New York.
The settlement which also covers charges levied against the firm by the Financial Crimes Enforcement Network will feature the payment of a $100 million civil monetary penalty.
“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 Chairman Rostin Behnam. “The CFTC will take prompt action when activities impacting CFTC jurisdictional markets raise customer and consumer protection concerns.”
The huge settlement has been used by officials to send a message to other cryptocurrency exchange outfits that the registration requirements for mainstream derivatives platforms is also applicable irrespective of the market niche.
The US regulators charged BitMex for operating and allowing American residents to trade cryptocurrency derivatives from at least November 2014 through October 2020. The exchange was known for its high leverage products, an offering regulators claim is unhealthy for consumers.
The settlement comes off as a standalone deal that absolves only the company as the CFTC confirmed the continuation of its litigation with the firm’s founders and former executives including former Chief Executive Officer (CEO) Arthur Hayes, as well as Benjamin Delo, and Samuel Reed.
“We are very glad to put this behind us,” said BitMEX CEO Alexander Höptner. “We take our responsibilities extremely seriously, and will continue to actively engage with regulators around the world to ensure that we play a positive role in helping to shape the future of this extraordinary asset class.”
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