A lawsuit has been filed by the US Commodity Futures Trading Commission (CFTC) against BiTMEX for ignoring the regulations. US Department of Justice hearing the lawsuit found BitMEX involved in willfully violating the regulations by allowing unregistered trading.
On last Thursday, CFTC told the press that it has filed complaints against BitMEX, its owners Samuel Reed and Ben Delo. The exchange’s CEO Arthur Hayes has also been made a party in the lawsuit. In the suit, CFTC has raised an allegation that the exchange allowed illicit crypto-trading activities from its platform. CFTC also alleged that the illegal activities were allowed in total disregard of the prescribed regulations.
CFTC has also lodged complaints against various crypto-trading exchanges/corporations which include ABS Global Trading, 100x Holding, HDR Global etc. The allegations against these are the same that they have allowed their platforms to conduct illicit trading activities.
Afterward, Audrey Strauss who is acting US Attorney for Southern District of New York, also said in a press statement. In his statement, he said that the owners and CEO of BitMEX have been charged for deliberately violating the law.
Samuel Reed, the founder of BitMEX has been arrested, as confirmed through the press release of SDNY. The other accused are still absconding and US law enforcement agencies are tasked to apprehend them, said US Attorney.
As per the SDNY press release, Reed has already been arrested while the rest remain at large.
During the course of the hearing, one of the defendants argued that BitMEX was established outside the US. The reason for raising this argument was explained by FBI Director William Sweeney. He said since the penalty for bribing regulatory authority in that jurisdiction is almost to none, therefore defendant has taken this plea. However, if charges are proved then heavy fines will be imposed and may include federal imprisonment as well, he said.
On the other hand, one of the counsel for the defendant told CoinDesk that they will contest the charges. He said that his client never acted contrary to the regulations of CFTC and cooperated with the investigation. But no proper hearing has been given to his client by the US Attorney Office.
CFTC has stated that approximately US$ 11 Billion has been received by the exchange in the form of Bitcoin deposits. In addition, the exchange has also collected US$ 1 Billion in the shape of fees from US customers.