Bitmex to Pay At Least $100 Million to Settle Case with FinCEN and CFTC

Azeez Mustapha
11 August 2021 | Updated: 11 August 2021

Bitmex announced, on Tuesday, that it had come to an understanding with both the United States Commodity Futures Trading Commission (CFTC) and Financial Crimes Enforcement Network (FinCEN) regarding the recent investigations into the company’s conduct by both agencies. The cryptocurrency company noted that it is ready to pay as much as $100 million to settle the cases. The CEO of the company, Alexander Höptner, stated that:

“Today marks an important day in our company’s history, and we are very glad to put this behind us.”

As crypto matures and enters a new era, we too have evolved into the largest crypto derivatives platform with a fully verified user base.”

Meanwhile, the CFTC released a separate memo on Tuesday, noting that “the U.S. District Court for the Southern District of New York has entered a consent order against five companies charged with operating the Bitmex cryptocurrency derivatives trading platform.” The five companies include HDR Global Trading Ltd., 100x Holding Limited, ABS Global Trading Ltd., Shine Effort Inc Limited, and HDR Global Services (Bermuda) Ltd.

FinCEN also released an announcement on Tuesday confirming that it has decided on a $100 million civil money penalty against Bitmex “for willful violations of the Bank Secrecy Act.”

The FinCEN noted that:

“Bitmex, which operated as an unregistered futures commission merchant (FCM) and provided money transmission services, willfully failed to comply with its obligations under the BSA.

For over six years, BitMEX failed to implement and maintain a compliant anti-money laundering program and a customer identification program, and it failed to report certain suspicious activity.”

The bureau added that:

“These willful failures expose financial institutions to an increased risk of conducting transactions with money launderers and terrorist financiers, including non-compliant exchanges in high-risk jurisdictions, ransomware attackers, and darknet marketplaces.”

Bitmex to File Additional Suspicious Activity Report

Additionally, FinCEN revealed that the cryptocurrency exchange had facilitated about $209 million in transactions with darknet markets or unregistered financial services businesses. The bureau also claimed that Bitmex carried out transactions involving high-risk countries and defaulted in filing a Suspicious Activity Report (SAR) On at least 58 fraudulent transactions.

That said, Bitmex also agreed to consult on whether it must file additional SARs and “to ensure that appropriate policies, procedures, and controls are in place.”

 

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Azeez Mustapha

Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.