Jacquelyn Melinek

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 <ul>
 <li>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. </li>
 <li>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</li>
 </ul>
 
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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.&nbsp;



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.&nbsp;



“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.&nbsp;



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.&nbsp;



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.&nbsp;



“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.&nbsp;



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



“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.&nbsp;



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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BitMex

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

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 <ul>
 <li>The use of derivative trading services provided by Huobi’s website is prohibited for anyone in mainland China, Taiwan, Israel, Iraq, Bangladesh, Bolivia, Ecuador, Kyrgyzstan, Sevastopol and the United Kingdom for retail users only. </li>
 <li>This update follows last week’s news that Huobi’s Twitter account vanished but reappeared later in the week.</li>
 </ul>
 
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Huobi, a bitcoin and ethereum trading platform, is no longer permitting Chinese-based users to trade derivatives on its website, according to its <a href="https://www.huobi.com/support/en-us/detail/360000298561" target="_blank" rel="noreferrer noopener">updated user agreement</a> notice. 



China was added to the list of unlawful jurisdictions for its derivatives trading service, but its users can still access the exchange platform and spot trade, according to the updated fine print on June 26.



“The Company may suspend or terminate your account or use of the Service, or the processing of any digital asset transaction, at any time if it determines in its sole discretion that you have violated this Agreement or that its provision or your use of the Service in your jurisdiction is unlawful,” it said.&nbsp;



Use of services is prohibited for people in the United States, Canada, Hong Kong, Japan, Cuba, Iran, North Korea, Sudan, Syria, Venezuela and Crimea, it said. Meanwhile, the use of derivative trading services provided by Huobi’s website is prohibited for anyone in mainland China, Taiwan, Israel, Iraq, Bangladesh, Bolivia, Ecuador, Kyrgyzstan, Sevastopol and the United Kingdom for retail users only, the company said.&nbsp;&nbsp;



The list of countries or regions under prohibited restrictions can change due to new products or policies, according to the user agreement.&nbsp;



This update follows last week’s news that Huobi’s Twitter <a href="https://cms.blockworks.co/huobi-blames-unauthorized-access-attempt-for-twitter-outage/" target="_blank" rel="noreferrer noopener">account vanished</a> but reappeared later in the week. After the incident, the company tweeted a <a href="https://twitter.com/HuobiGlobal/status/1408015811004887040?s=20" target="_blank" rel="noreferrer noopener">statement</a> that “everything is back to normal,” and added, “currently there are many rumors floating out there in the world of crypto. Huobi assures that we are operating under fully legal and compliant standards to best protect users and your assets.”



When the account disappeared it led many to think that Seychelles-incorporated, but Hong Kong-listed Huobi had been caught in the crosshairs of the territory’s regulators, Blockworks previously <a href="https://cms.blockworks.co/huobi-blames-unauthorized-access-attempt-for-twitter-outage/" target="_blank" rel="noreferrer noopener">reported</a>. 



In general, <a href="https://cms.blockworks.co/hong-kongs-digital-assets-double-standard/" target="_blank" rel="noreferrer noopener">Hong Kong</a> and Beijing have been cracking down on crypto. Hong Kong <a href="https://www.globallegalinsights.com/practice-areas/blockchain-laws-and-regulations/hong-kong" target="_blank" rel="noreferrer noopener">restricts exchanges</a> to professional investors only — Huobi opens its doors to everyone — and while the firm is Seychelles registered, it is publicly listed on the Hong Kong exchange.



Separately, earlier this month, securities regulators in Thailand, as part of the country’s broader crackdown on crypto offerings with “no clear objectives or substance”, ordered Huobi to cease operations until it cleans up its organizational structure and reconfigures its offerings to become compliant with local regulatory standards, Blockworks previously reported.

Seychelles

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