The US Commodity Futures Trading Commission (CFTC) and the US Department of Justice (DoJ) have both filed charges today. These charges are against BitMEX, a prominent crypto exchange, accusing it of evading the US anti-money laundering laws.
CFTC Going To Seychelles For Complaint
BitMEX stands as a crypto exchange registered in Seychelles, and is one of the top crypto exchanges out there. In regards to crypto trading volume, it stands as the world’s second-biggest exchange, as per the data from Nomics.
It should be noted, however, that BitMEX is neither based in the US, nor does it operate within its borders. However, US authorities seem to consider this a minor setback, with the complaint stating that BitMEX is failing to comply with the “Know Your Customer” laws the US holds. Through opting out of the legislation of a country it doesn’t’ operate in, the US government has accused BitMEX of facilitating money laundering.
The Charges Involved
The CFTC, through its legal action, named several entities, in particular. Named individuals are Samual Reed and Ben Delo, owners of the company, as well as Arthur Hayes, the CEO of BitMEX. Alongside this, 100x Holding Ltd, HDR Global Trading Limited, Shine Effort Inc Ltd, ABS Global Trading Ltd, and HDR Global Services (Bermuda) Ltd were all cited as corporate entities.
According to the complaint, Delo, Hayes, and Reed, as well as BitMEX’s first employee, Gregory Dwyer, have been charged regarding the violation of the Bank Secrecy Act. Alongside this, they’ve been accused of conspiracy to violate the act, as well, with Reed already having been arrested on the charges themselves.
CFTC Doesn’t Care What Country You’re In
Even though BitMEX is neither registered nor operates within the US, the CFTC is adamant regarding this entity, operating legally out of a foreign country, is bad for the US. The CFTC claimed that, as the global leader in this space, it rests on the US’s shoulders to root out any illegal activities, as specified in this case. The CFTC then proceeded to cite how market integrity is paramount to a flourishing space of new, innovative financial products.
As such, the CFTC claims that it’s incapable of allowing bad actors, even those outside of its jurisdiction, to break the law. According to the CFTC, this allows the exchange to gain a competitive edge, as opposed to those that do the “right thing” by complying with US legislation.
Many things can be said about the “right” and “wrong” of any country’s legislation, though it’s clear as day that the US is leveraging its political weight to try and shut BitMEX down. Watching this play out will be interesting, indeed, and hopefully, BitMEX can get out of this without too much damage, assuming it’s not trying to push into US markets illegally.