BitMEX’s KYC: good news for Ethereum (ETH) and DeFi? Either way, in the end, this compliance with US laws will not have allowed the exchange to escape the wrath of the Commodity Futures Trading Commission (CFTC).
BitMEX’s Paradise Vacation Spoiled By CFTC
The CFTC announced in a statement, to have filed a civil complaint, in the southern district of New York, October 1, 2020, for the exchange BitMEX based in Seychelles.
The regulator has decided to take legal action against the CEO of BitMEX, Arthur hayes, 2 shareholders of the exchange, Ben delo and Samuel reed, and 5 legal persons – DR Global Trading Limited, 100x Holding Limited, ABS Global Trading Limited, Shine Effort Inc Limited, and HDR Global Services (Bermuda) Limited (BitMEX).
The CFTC motivates his prosecution by accusing BitMEX failure to register with the Commission, lack of KYC procedures and anti-AML arrangements, despite the exchange reportedly offering trading services worth $ 1,000 billion to US clients, since its creation in 2014.
The CFTC calls for restitution of “ill-gotten gains”, financial penalties, as well as permanent trading bans and an injunction against future infringements.
The price of Bitcoin (BTC) did not resist the announcement of the CFTC ; the BTC fell almost 4% in 1 hour on the 1er October 2020.
Justice or judicial relentlessness?
The prosecutor of New York for his part indicted Arthur Hayes, Ben delo, Samuel reed and Gregory Dwyer, the business development manager of BitMEX, to have violated and conspired to violate the law on banking secrecy.
All four face a maximum prison sentence of 5 years and a fine of $ 250,000.
The technical director of BitMEX, Samuel reed, was arrested on October 1 in the Massachusetts, while the other 3 are still at large.
Arthur Hayes, the brilliant as well as sulphurous CEO of bitMEX seems to remain generally cold in the face of the turmoil. The interested party does not hesitate to like on social networks the many memes and other diversions that have flourished since yesterday. It also seems a lot of fun – or feigns it with talent – to be now considered a plague victim by part of the global crypto scene.
Reports indicating an investigation of the CFTC sure BitMEX, had appeared in 2019; these investigations were motivated by the use of the exchange by US clients.
The conditions of use of BitMEX formally prohibit its use by residents of the United States, those of certain provinces of Canada, of the China and other countries.
A simple VPN is enough, however, to bypass the blocking by IP address set up by the platform.
Law is law: wisdom or stupefying formula? The regulatory authorities are there to defend the “innocent” US investor who risks his money on a trading platform that already denies him access. The actions of the CFTC and the New York attorney are far from devoid – how do we say already -, hypocrisy. Satoshi Nakamoto created Bitcoin, empowering its holders through its decentralization. We are waiting for another (or the same) Nakamoto to create an exchange that would escape any control of the authorities, these financial policemen. When will legal action be taken against the US government and its entire clique, for having violated the basic principles of monetary and financial economics, by distributing free dollars in the management of the current economic crisis?
Litecoin, welcome in the Silver Age