The U.S. Commodities and Futures Commission (CFTC), together with the Federal Bureau of Investigation (FBI), has charged BitMEX with a failure to prevent money laundering, also running an illicit derivatives trading platform.
The two charges carry a maximum penalty of five years in prison for the accused.
Connecting with the charges, the United States Office of the Southern District of New York has arraigned four individuals: Arthur Hayes, Ben Delo, Samuel Reed, and Gregory Dwyer.
Yesterday, the authorities arrested BitMEX CTO, Samuel Redd, in Massachusetts. While the others still “remain at large.”
On the other hand, U.S. authorities believe that both Hayes and Delo are in Hong Kong, while Dwyer might be in Australia or Bermuda.
Talking about the case, FBI Assistant Director William F. Sweeney Jr. gave a contemptuous account of what investigators turned up.
Sweeney Jr. noted that the accused have willfully violated the Bank Secrecy Act and then evaded the U.S. anti-money laundering requirements. Additionally, he said that one of the accused is bragging about bribing regulators in Seychelles, wherein BitMEX is incorporated, for the cost of “a coconut.”
“Thanks to the diligent work of our agents, analysts, and partners with the CFTC, they will soon learn the price of their alleged crimes will not be paid with tropical fruit, but rather could result in fines, restitution, and federal prison time.”
BitMEX’s Response to the Allegations
As a response, BitMEX has released a statement refuting the charges. They are claiming that the alleged violation of the law was the effect of a lack of clarity on the regulators’ part.
“We strongly disagree with the U.S. government’s heavy-handed decision to bring these charges, and intend to defend the allegations vigorously. From our early days as a start-up, we have always sought to comply with applicable U.S. laws, as those laws were understood at the time and based on available guidance.”
Nevertheless, BitMEX is still open for trading. The firm is also seeking to guarantee the users by saying that the deposits are safe.
On the other hand, BitMEX users are seen clamoring to withdraw their funds. As far as now, outflows from the exchange are nearing to 25k per Bitcoin.
“24,577 bitcoin has now been withdrawn from BitMEX, 65% to exchanges with the remainder to unhosted wallets. Total inflows to exchanges averaged 65k bitcoin this last week, so BitMEX withdrawals are adding 25% more liquidity already and more will come with the 08:00 UTC withdrawal”.
— Philip Gradwell (@philip_gradwell) October 2, 2020
J.P. Morgan Market Manipulated the Results of Fines for the Bank
On the charges of manipulating the precious metals markets, J.P. Morgan agreed to pay $920M to settle with U.S. Regulators.
The firm has admitted “spoofing” in 2009 and 2016 to impact the market in their favor.
Instead of the systemic corruption, Daniel Pinto, the bank’s COO, has put down to the individual traders’ actions, who have moved on since.
“The conduct of the individuals referenced in today’s resolutions is unacceptable and they are no longer with the firm.”
Though, as it was pointed out by @TheCryptoLark, the crimes of J.P. Morgan didn’t result in prison time for the CEO Jamie Dimon; he believed that this is an example of bias towards the bigger banks.
“Remember 2 days ago when JP Morgan was caught rigging #gold markets for 8 years and their CEO didn’t go to jail? Yeah, but let’s throw the book at Bitmex because something something #bitcoin”.
— Lark Davis (@TheCryptoLark) October 1, 2020
The J.P. Morgan spoofing cases come off from last month’s U.S. government leak, where the firm was also alleged of money laundering.
According to some reports, a consortium of big banks has washed $2T of dirty money from the proceeds of drugs, terrorism, and corruption. It then continued to happen even when being warned by U.S. officials.
The banks that are involved are Bank of New York Mellon, Deutsche Bank, HSBC, J.P. Morgan, and Standard Chartered.
Recently, Bitcoin’s price has closed down to 2% on the news of the BitMEX charges. Now, it sees a continuation of the downtrend; currently, the price of BTC is $10,661.
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