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BitMEX Settles With CFTC and FinCEN for $100 Million



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Key Takeaways

  • The major cryptocurrency derivatives exchange BitMEX has reached a settlement with FinCEN and the CFTC.
  • The company will pay up to $100,000 in penalties to the regulators.
  • BitMEX faced charges last year for its failure to create a strong KYC/AML program and report suspicious activity.

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BitMEX has reached a settlement with two U.S. regulators, according to an announcement on the derivative exchange’s website.

BitMEX Will Pay $100 Million

BitMEX has reached a resolution with two regulators: the United States Commodity Futures Trading Commission (CFTC) and the Financial Crimes Enforcement Network (FinCEN).

The company will pay up to $100 million as a penalty to resolve charges filed against it last October. $80 million will be paid to FINCEN and the CFTC, while $20 million may be suspended and offset after the company engages in reviews ordered by the regulators.

BitMEX CEO Alexander Höptner wrote that the company aims to expand its services and diversify its hiring practices. He added that putting these legal charges in the past “will only accelerate our evolution and [put] us firmly on the right path.”

Höptner and BitMEX outlined the various KYC and user verification practices that the exchange has engaged in since 2019, which can be seen in the company’s original blog post.

CFTC and FinCEN Reveal Details

A press release from the CFTC indicates that BitMEX was charged with illegally operating a cryptocurrency trading platform and violating anti-money laundering (AML) regulations.

Meanwhile, FinCEN says that the cryptocurrency exchange willfully violated the Bank Secrecy Act by failing to create a strong AML program. For more than six years, it failed to maintain a customer identification platform and report suspicious activity.

The regulators will also ensure that BitMEX is not serving customers based in the U.S., a rule that took effect circa 2018.

The news comes just one day after the U.S. Securities and Exchange Commission announced a settlement with another major exchange, Poloniex. Those parties reached a $10 million settlement.

Disclaimer: At the time of writing this author held less than $75 of Bitcoin, Ethereum, and altcoins.

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