Founders of Crypto Exchange Settle CFTC Charges for Registration and AML Violations

The founders of a cryptocurrency derivatives exchange settled CFTC charges related to owning and operating an unregistered trading platform.

In separate consent orders entered into in the Southern District of New York, the individuals each consented to being liable as a controlling person of BitMEX (the derivatives trading platform) and related entities. The violations of the legal entities are covered in a separate consent order entered into in the Southern District in August 2021 (see related coverage).

In 2020, the CFTC alleged that BitMEX (i) illegally operated as an unregistered futures commission merchant and was not registered as a swap execution facility or designated as a contract market, and (ii) failed to implement a customer information program, know-your-customer procedures and an adequate AML program (see related news).

To settle the charges, each of the individuals agreed to pay $10 million in civil monetary penalties and cease further violations of the CEA and CFTC regulations as charged.