Judgement day has come for BitMEX, the most popular crypto derivatives exchange in the world, with a criminal indictment being launched by the Department of Justice, and a simultaneous civil action from the Commodity Futures Trading Commission (CFTC).
Specifically, the Founders and Executives of BitMEX, including Arthur Hayes, Benjamin Delo, Samuel Reed, and Gregory Dwyer are being charged with violations of the Bank Secrecy Act and conspiring to violate the Bank Secrecy Act.
Essentially, the Department of Justice alleges that BitMEX failed to follow anti-money laundering guidelines, yet still allowed users from the United States.
Indeed, one of the reasons BitMEX was so popular is that it allowed anonymous crypto derivatives trading. Literally, people could trade tremendous amounts of crypto derivatives on BitMEX without providing identification info.
This is a violation of both crypto derivatives regulations, since crypto derivatives are basically not allowed in the United States, and it is a flagrant violation of money laundering laws.
BitMEX used the loophole that they were outside the United States, and said United States users weren’t allowed to trade on BitMEX, but United States traders simply used VPNs to login to BitMEX and trade anonymously.
Clearly, the loophole that BitMEX was using failed, and now BitMEX is in big trouble.
As for the CFTC charges, the CFTC is seeking civil penalties for operating an unlicensed trading platform in the United States and money laundering violations.
What happens next is unclear. It appears the Department of Justice is going to arrest the BitMEX Founders and Executives, and the Department of Justice says they are ‘at large’ for now, meaning they have not been captured yet. Beyond that, it seems likely that the United States will seize all of BitMEX’s assets.
Thus, BitMEX, the biggest crypto derivatives exchange in the world, is getting totally rekt by the United States government, so if you haven’t taken your money out of BitMEX, do so now, since BitMEX is very likely to be forced offline in the coming days.
Crypto.IQ will post more articles about this major story as it progresses, so stay tuned.