The Charges: A Closer Look

The infamous BitMEX crew just got a hefty ticket for their antics in the crypto world! A whopping $30 million in total—and you guessed it, it’s not Monopoly money. The CFTC (Commodity Futures Trading Commission) slapped each co-founder, Arthur Hayes, Benjamin Delo, and Samuel Reed, with a $10 million fine for not following the rules. It all boils down to a period between November 2014 and October 2020 when they thought they could operate like the Wild West with their crypto derivatives exchange.

CFTC’s Case Against BitMEX

In case you missed it, the CFTC decided to go all law enforcement on the BitMEX trio back in October 2020. The agency accused them of running the exchange while also taking a little too much business from the U.S., and let’s just say Uncle Sam isn’t a fan of that! They allegedly accepted orders and funds from American customers like they were handing out candy on Halloween, indulging in trades of cryptos like Bitcoin, Ether, and Litecoin derivatives.

What Went Wrong?

• Unregistered Operations: The CFTC pointed out some major red flags, like trading without the necessary approval as a Designated Contract Market or a Swap Execution Facility.
• No KYC or AML: There was also a major oversight regarding customer verification and anti-money laundering protocols. They really dropped the ball on that one!

CFTC commissioner Carline D. Pham put it best: they’re on a mission to hold accountable those who think they can play fast and loose with the law.

Court’s Response and Public Reaction

Following the ruling, it was apparent that the court wasn’t going to let this slide. The judge was highly aware of the seriousness of the offenses, especially since this isn’t the first rodeo for Hayes and Delo. They already faced charges from the DOJ regarding their failure to implement an AML program. Spoiler alert: their mothers weren’t too pleased!

The Bigger Picture: Market Regulation

This case is just a piece of a larger puzzle. It emphasizes the overarching framework that regulators are clamping down on in the rapidly evolving world of cryptocurrencies. Much like keeping an eye on the kids at the candy store, regulators want to make sure everyone is playing fair and square. And with BitMEX paying a separate $100 million fine last year, it’s clear that this industry better play by the rules—or face some serious consequences.