BitMex, one of the world’s largest exchanges for crypto derivatives, has been ordered to pay penalties amounting to $100 million in civil charges.  

This came after formal complaints by American watchdogs’ the Commodities Futures Trading Commission (CFTC), and the Financial Crimes Enforcement Network (FinCEN) were laid in October 2020 against the company’s various entities, as well as three of its cofounders. 

BitMex Operated Illegally, Broke AML Laws  

A U.S. District Court for the Southern District of New York found BitMex guilty of contravening both the Commodity Exchange Act (CEA) and CFTC’s regulations. Specifically, it was detailed that the exchange was knowingly operating illegally on U.S. soil for at least six years, accepting funds from U.S. investors for cryptocurrency derivatives. Furthermore, they were found to have violated Anti-Money Laundering (AML) and Know-Your-Customer (KYC) guidelines. 

FinCEN claimed that BitMex had conducted at least $209 million in transactions with “known darknet markets or unregistered money services businesses providing mixing services.”

CFTC’s Acting Chairman, Rostin Behnam, had this to say after the order was given: 

“This case reinforces the expectation that the digital assets industry, as it continues to touch a broader pool of market participants, takes seriously its responsibilities in the regulated financial industry and its duties to develop and adhere to a culture of compliance.”

Compliance in Crypto

It could be argued that compliance in cryptocurrency is more complicated than in traditional finance. We’ve experienced first-hand that because you operate with bitcoin and cryptocurrencies, some people are far more guarded with their information and don’t understand our regulatory obligations. 

But, these are necessary - not only for the security of assets but the long term operation of the business too.  

The more bitcoin-based businesses work with regulatory bodies, the better the prospects of bitcoin being accepted within the mainstream monetary system. 

After all, Bitcoin was never intended for anarchy, and in fact, the true Bitcoin - Bitcoin Satoshi Vision (BSV) - was designed to act within the parameters of regulation. Bitcoin was never about dodging the long arm of the law. It was about bringing about honest money, and bitcoin businesses that continue to operate outside of regulation will continue to be burned as the financial watchdogs across the globe clamp down further in this space.

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