{"id":29506,"date":"2020-10-01T19:31:55","date_gmt":"2020-10-01T16:31:55","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=29506"},"modified":"2025-08-27T17:23:48","modified_gmt":"2025-08-27T14:23:48","slug":"cftc-sues-bitmex-and-its-founders","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/cftc-sues-bitmex-and-its-founders\/","title":{"rendered":"CFTC sues BitMEX and its founders"},"content":{"rendered":"<p>The U.S. Commodity Futures Trading Commission (CFTC) <a href=\"https:\/\/www.cftc.gov\/PressRoom\/PressReleases\/8270-20\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">has sued<\/a> the cryptocurrency derivatives exchange BitMEX and its owners, including co-founder and CEO Arthur Hayes. They are accused of operating an unregistered trading platform and violating CFTC rules on KYC\/AML procedures.<\/p>\n<p><!--more--><\/p>\n<p>Defendants also include BitMEX co-founders Ben Delo and Samuel Reed, parent companies HDR Global Trading Limited and 100x Holdings Limited, as well as ABS Global Trading Limited, Shine Effort Inc Limited and HDR Global Services (Bermuda). The suit will be heard in the U.S. District Court for the Southern District of New York.<\/p>\n<p>Additionally, the U.S. Department of Justice charged Hayes, Delo, Reed and BitMEX&#8217;s head of Business Development Greg Dwyer with violations of the Bank Secrecy Act.<\/p>\n<p>As representatives of the agency stated, Reed (CTO) was arrested this morning in Massachusetts and will appear in court there. Hayes, Delo and Dwyer remain at large.<\/p>\n<blockquote>\n<p>\u201cWe allege that the four defendants through their company-owned cryptocurrency trading platform BitMEX knowingly violated the Bank Secrecy Act, evading U.S. anti-money-laundering requirements,\u201d said FBI Deputy Director William Sweeney.<\/p>\n<\/blockquote>\n<p>Lawyer Jake Chervinsky noted that the DOJ charge is the standout among the filings. The maximum penalty for Hayes and his business partners on the charges is five years in prison.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p dir=\"ltr\" lang=\"en\">\ud83d\udea8 The CFTC just charged BitMEX with illegally operating a derivatives trading platform.<\/p>\n<p>But the *much* bigger news: USAO-SDNY has indicted Arthur Hayes &#038; colleagues on criminal charges for Bank Secrecy Act violations. Maximum penalty: 5 years in prison.<a href=\"https:\/\/t.co\/hSmaC54S5b\">https:\/\/t.co\/hSmaC54S5b<\/a><\/p>\n<p>\u2014 Jake Chervinsky (@jchervinsky) <a href=\"https:\/\/twitter.com\/jchervinsky\/status\/1311697839429484544?ref_src=twsrc%5Etfw\">October 1, 2020<\/a><\/p>\n<\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>In BitMEX, the charges are contested, and the exchange says it is prepared to defend its interests in court. Representatives say they have always complied with U.S. laws and followed regulator instructions.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p dir=\"ltr\" lang=\"en\">In response to the U.S. CFTC and DOJ filings, we\u2019ve posted a statement on our blog: <a href=\"https:\/\/t.co\/TCmF7IvMmn\">https:\/\/t.co\/TCmF7IvMmn<\/a><\/p>\n<p>\u2014 BitMEX (@BitMEX) <a href=\"https:\/\/twitter.com\/BitMEX\/status\/1311755332088102914?ref_src=twsrc%5Etfw\">October 1, 2020<\/a><\/p>\n<\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>For the moment, Bitcoin\u2019s price slid to around $10,500.<\/p>\n<div id=\"attachment_111939\" style=\"width: 1445px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-111939\" class=\"wp-image-111939 size-full\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/btc-price-2020-10-01.png\" alt=\"CFTC sues BitMEX and its founders\" width=\"1435\" height=\"869\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/btc-price-2020-10-01.png 1435w, https:\/\/u1f987.com\/wp-content\/uploads\/btc-price-2020-10-01-300x182.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/btc-price-2020-10-01-1024x620.png 1024w, https:\/\/u1f987.com\/wp-content\/uploads\/btc-price-2020-10-01-768x465.png 768w\" sizes=\"auto, (max-width: 1435px) 100vw, 1435px\" \/><\/p>\n<p id=\"caption-attachment-111939\" class=\"wp-caption-text\">Source: BTC\/USD chart from Bitstamp on TradingView.<\/p>\n<\/div>\n<p>Despite the situation, BitMEX processed withdrawals in normal mode at 17:45 UTC. The exchange said it would process further withdrawals at 8:00 UTC and 13:00 UTC (October 2).<\/p>\n<blockquote class=\"twitter-tweet\">\n<p dir=\"ltr\" lang=\"en\">Can confirm: <a href=\"https:\/\/t.co\/J8BSWJac2j\">https:\/\/t.co\/J8BSWJac2j<\/a><\/p>\n<p>\u2014 Sergej Kotliar (@ziggamon) <a href=\"https:\/\/twitter.com\/ziggamon\/status\/1311728067023450112?ref_src=twsrc%5Etfw\">October 1, 2020<\/a><\/p>\n<\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/p>\n<blockquote class=\"twitter-tweet\">\n<p dir=\"ltr\" lang=\"en\">Pretty impressed tbh. Took some risk off MEX, but not all. Still want to make money.<\/p>\n<p>\u2014 Crypto_C (@Cryptoc_XBT) <a href=\"https:\/\/twitter.com\/Cryptoc_XBT\/status\/1311726935127601154?ref_src=twsrc%5Etfw\">October 1, 2020<\/a><\/p>\n<\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/p>\n<p>Per Glassnode, about 170,000 BTC are held on BitMEX\u2019s accounts.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p dir=\"ltr\" lang=\"en\">According to our data, around 170,000 <a href=\"https:\/\/twitter.com\/search?q=%24BTC&#038;src=ctag&#038;ref_src=twsrc%5Etfw\">$BTC<\/a> (~$1.8 billion USD) are being held in <a href=\"https:\/\/twitter.com\/hashtag\/BitMEX?src=hash&#038;ref_src=twsrc%5Etfw\">#BitMEX<\/a> wallets.<\/p>\n<p>That\u2019s almost 1% of the circulating <a href=\"https:\/\/twitter.com\/hashtag\/Bitcoin?src=hash&#038;ref_src=twsrc%5Etfw\">#Bitcoin<\/a> supply.<a href=\"https:\/\/t.co\/avHmJDN1b2\">https:\/\/t.co\/avHmJDN1b2<\/a> <a href=\"https:\/\/t.co\/sf6ahcaUUf\">pic.twitter.com\/sf6ahcaUUf<\/a><\/p>\n<p>\u2014 glassnode (@glassnode) <a href=\"https:\/\/twitter.com\/glassnode\/status\/1311742164158877701?ref_src=twsrc%5Etfw\">October 1, 2020<\/a><\/p>\n<\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/p>\n<p>In May, The Bitcoin Manipulation Abatement LLC (BMA) filed a lawsuit against BitMEX in the United States, accusing the exchange of operating illegally in the United States, manipulating cryptocurrency markets, fraud, unfair business practices, money laundering and improper management of raised funds.<\/p>\n<p>In August, BitMEX <a href=\"https:\/\/u1f987.com\/en\/news\/bitmex-tightens-user-verification\">introduced<\/a> new verification rules, under which users must confirm their residential address and provide identity documents. The changes do not apply to corporate clients.<\/p>\n<p>Earlier, the exchange\u2019s parent company underwent restructuring, resulting in the creation of 100x Group to oversee the exchange. The company said its plans extend far beyond BitMEX.<\/p>\n<p style=\"margin: 12px auto 6px auto; font-family: Helvetica,Arial,Sans-serif; font-style: normal; font-variant: normal; font-weight: normal; font-size: 14px; line-height: normal; font-size-adjust: none; font-stretch: normal; -x-system-font: none; display: block;\"><a style=\"text-decoration: underline;\" title=\"View Enf Hdr Global Trading Complaint 100120 on Scribd\" href=\"https:\/\/www.scribd.com\/document\/478307878\/Enf-Hdr-Global-Trading-Complaint-100120#from_embed\">Enf Hdr Global Trading Complaint 100120<\/a> by <a style=\"text-decoration: underline;\" title=\"View ForkLog's profile on Scribd\" href=\"https:\/\/www.scribd.com\/user\/456422024\/ForkLog#from_embed\">ForkLog<\/a> on Scribd<\/p>\n<p><iframe loading=\"lazy\" id=\"doc_74734\" class=\"scribd_iframe_embed\" title=\"Enf Hdr Global Trading Complaint 100120\" src=\"https:\/\/www.scribd.com\/embeds\/478307878\/content?start_page=1&#038;view_mode=scroll&#038;access_key=key-39HNK8F0Rpl3De5EObuz\" width=\"600\" height=\"800\" frameborder=\"0\" scrolling=\"no\" data-auto-height=\"false\" data-aspect-ratio=\"0.7729220222793488\"><\/iframe><\/p>\n<p>Subscribe to ForkLog&#8217;s news on Telegram: <a href=\"https:\/\/t.me\/forkloglive\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">ForkLog FEED<\/a> \u2014 all the news, <a href=\"https:\/\/telegram.me\/forklog\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">ForkLog<\/a> \u2014 the most important news and polls.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>U.S. CFTC sues BitMEX and its owners for operating an unregistered derivatives trading platform and violating KYC\/AML rules.<\/p>\n","protected":false},"author":1,"featured_media":29507,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1193,788,879],"class_list":["post-29506","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-arthur-hayes","tag-bitmex","tag-cftc"],"aioseo_notices":[],"amp_enabled":true,"views":"38","promo_type":"1","layout_type":"","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/29506","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=29506"}],"version-history":[{"count":1,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/29506\/revisions"}],"predecessor-version":[{"id":29508,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/29506\/revisions\/29508"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/29507"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=29506"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=29506"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=29506"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}