BitMEX Owners Indicted for Accepting US Clients and AML Violations

BitMEX Owners Indicted for Accepting US Clients and AML Violations”

HDR Global Trading, BitMEX's parent company, and the four men that stand accused of violating the Bank Secrecy Act, are failing to maintain an adequate anti-money laundering program and operating an unlicensed business.

This news sent shockwaves throughout the cryptocurrency market, with Bitcoin's price reeling from $10,900 to lows of $10,400.

The price action comes several hours after a 3.7% fall on news that USA officials indicted BitMEX owner Arthur Hayes and other company executives on charges the crypto trading platform violated know-your-customer and derivatives trading laws. Moreover, also today, the US Attorney for the District of NY indicted Hayes, Delo, and Reed, along with Gregory Dwyer, 37, on federal charges of violating the Bank Secrecy Act and conspiracy to violate the Bank Secrecy Act, each of which carries a maximum penalty of five years in prison.

Additionally, the charges seemingly involve a referral system which gave a portion of trading fees to clients who introduced new traders to BitMEX.

The filing alleges that BitMEX received over $11 billion in bitcoin deposits and amassed more than $1 billion in transaction fees while conducting the majority of its business in the United States and accepting U.S. customers' funds and orders.

BitMEX, a top cryptocurrency exchange that is big in the crypto derivatives sector, is the target of an enforcement action filed by the Commodity Futures Trading Commission (CFTC).

"Much of this volume, and related transaction fees, derives from the operation of the platform from the U.S. and its extensive solicitation of and access to USA customers", the Commission said.

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The total crypto-market capitalization lost around $13 billion in the hours following news that BitMEX was charged with USA regulation violations.

Second, on Thursday (October 1), the U.S. Commodity Futures Trading Commission (CFTC) announced that it had brought charges against "five entities and three individuals" that own and operate the crypto derivatives exchange BitMEX.

"Digital assets hold great promise for our derivatives markets and for our economy".

According to Heath P. Tarbert, Chairman of the CFTC, they can't allow "bad actors that break the law to gain an advantage over exchanges that are doing the right thing by complying with our rules".

Also named as defendants in the complaint, are HDR Global Trading Limited, 100x Holding Limited, ABS Global Trading Limited, Shine Effort Inc Limited, and HDR Global Services (Bermuda) Limited (BitMEX).

He said that market integrity plays an important role in helping "new and innovative financial products" flourish. This marks a notable decline from its recent highs of $10,900 that were set earlier this morning.

Bitcoin is also down by 1.9%, having fallen from $10,678 to around $10,400, at press time.

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