BitMEX Reaches Agreement With CFTC, Why It Could Mark A New Era For Crypto

BitMEX Reaches Agreement With CFTC, Why It Could Mark A New Era For Crypto

Crypto derivatives platform BitMEX and five associated companies have reached an agreement with the U.S. Commodities Futures Trading Commission (CFTC), per an official press release. The institution revealed that the U.S. District Court for the Southern District of New York approved a “consent order” against these entities.

In October 2020, BitMEX and the aforementioned companies with their founders, Arthur Hayes, Benjamin Delo, and Samuel Reed, were accused of operating the derivatives platform with “significant” aspects based in the U.S. In addition, the regulators claimed that the exchange took U.S.-based customers allowing them to trade cryptocurrencies, such as Bitcoin, Ethereum, Litecoin, and others.

As a result, BitMEX will have to pay $100 million in civil monetary penalty according to an additional agreement accepted by the Financial Crimes Enforcement Network (FinCEN). The order issued by the court forbids the crypto platform from “further violations of the Commodity Exchange Act (CEA) and CFTC’s regulations”. The Acting Chairman of the CFTC Rostin Behnam said:

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. The CFTC will take prompt action when activities impacting CFTC jurisdictional markets raise customer and consumer protection concerns.

The Acting Director of Enforcement Vincent McGonagle added that the regulations established for entities in traditional finances can be applied to cryptocurrencies and the digital asset market. McGonagle added:

Cryptocurrency trading platforms conducting business in the U.S. must obtain the appropriate registration, and must implement robust Know-Your-Customer and Anti-Money Laundering procedures.

Litigations against Hayes, Reed, and Delo are still ongoing. The court order acknowledged the efforts taken by BitMEX to improve its compliance with U.S. regulations. The exchange now has Anti-Money Laundering (AML) and Know Your Customer (KYC) policies.

A New Era In Crypto? BitMEX Celebrates “Compliances Milestones”

Via their Twitter handle, BitMEX announced the agreement with the U.S. authorities and claimed that the platform and the crypto industry will enter a new era. The platform believes that onboarding more users and increase crypto adoption will be achieved by “gaining their trust”.

In order to do so, the company believes that KYC, compliance, AML, and other tools are necessary. As seen below, BitMEX has been working on integrating these methods into their platform since late 2019 when they started their KYC build-out. They added:

We want the story of BitMEX to be not only one of a company that pioneered crypto derivatives, but also led the way in advancing crypto responsibly. We’re well on our way, and we thank our users for coming on the journey with us.

At the time of writing, Bitcoin trades at $45,610 with a 16.3% profit in the daily chart.