BitMEX Agrees to Settlement Up to $100M with US CFTC and FinCEN

The Seychelles-based company wrote it agrees to pay as much as $100 million to resolve charges with the US organizations, but did not clarify how much was going to each agency.

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BitMex CEO Alexander Höptner

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key takeaways

  • Exchanges that don’t provide flawless security and platform performance are left behind. And firms that demonstrate a willingness to respect and collaborate with regulators earn the trust of users,” Höptner said.
  • The company is expanding its capabilities to serve a broader subset of users through a business transformation under its “Beyond Derivatives” strategy to establish five new segments

BitMex, a cryptocurrency exchange and derivative trading platform, announced today that it has reached a settlement with the US Commodity Future Trading Commission (CFTC) and the Financial Crimes Enforcement Network (FinCEN) for investigations by both agencies, the company said in a blog post. 

The Seychelles-based company wrote it agrees to pay as much as $100 million to resolve the charges with the US organizations, but did not clarify how much was going to each agency. 

“The BitMEX matter was a shot across the bow to all DeFis regarding their BSA responsibilities. It’s a signal that regulators will bring actions against those who they allege do not take KYC/AML issues seriously,” former CFTC Enforcement Attorney Braden Perry, now a partner at Kansas City-based Kennyhertz, said in an email to Blockworks. 

The settlement is also a signal that the CFTC will continue to define and expand its jurisdiction into the decentralized finance entities, Perry said. “The settlement confirms US regulators had evidence that BitMEX, while offshore, dealt with customers or financial, data storage, or other computer systems in the US. Any argument that BitMEX blocked US users failed because all US users needed was a VPN to access the site,” Perry added. 

BitMex has a volume of $2.14 billion in the past 24 hours and has had $1.1 trillion in volume during the past 365 days, according to the company’s website. 

“Crypto is changing, and we’re changing with it,” said BitMex CEO Alexander Höptner, in a separate blog post. “The speed of change in the crypto space is extraordinary, but amongst the seemingly constant blur of activity, we’re seeing real momentum building around three undeniable trends,” Höptner said. 

The three trends in crypto that Höptner referred to are: fundamental change, inclusivity and responsibility. 

“Most importantly, crypto is becoming more responsible. Comprehensive user verification, compliance, and robust anti-money laundering controls are a must have. Exchanges that don’t provide flawless security and platform performance are left behind. And firms that demonstrate a willingness to respect and collaborate with regulators earn the trust of users,” Höptner said. 

He added that the company is expanding its capabilities to serve a broader subset of users through a business transformation under its “Beyond Derivatives” strategy to establish five new segments: Spot, custody and brokerage capabilities, as well as information products and an academy.

“Putting this legal matter with the CFTC and FinCEN behind us will only accelerate our evolution, and puts us firmly on the right path,” he said. 

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