- BitMEX was fined $100M by a US court for failing AML rules and KYC requirements over five years.
- HDR Global Trading faces a $100M penalty and two-year probation for breaking US financial laws.
- US users made up 11.5 percent of BitMEX’s base despite lack of regulatory approval.
HDR Global Trading Limited, the parent company of BitMEX, has been penalized by the United States District Court with a fine of $100 million. The penalty was given for violating the bank secrecy act and anti-money laundering rules. The decision was delivered by the Honorable Judge John Koeltl of the United States District Court for the Southern District of New York.
The court also placed HDR Global Trading Limited on a two year probation period. This decision concludes years of legal proceedings related to the exchange’s compliance failures.
Years of Non-Compliance
The Commodity Futures Trading Commission (CFTC) filed a civil lawsuit against BitMEX for its negligence in putting into practice essential measures in 2020. Among these was the KYC verification that was mandated by most exchanges and approvals from the CFTC to operate within the United States.
BitMEX facilitated trading by its U.S. users prior to obtaining the approval of the relevant regulatory authorities. It emerged that of its many users at the time, as many as 11.5% were based in the United States of America. The platform also earned $1.3 billion revenues during the period these violations were being committed.
BitMEX paid a $100 million civil penalty as part of a settlement with U.S. regulators in 2021. Despite this, authorities pursued further penalties, arguing the initial fine was insufficient.
Parent Company’s Reaction
HDR Global Trading Limited expressed disappointment with the latest penalty. The exchange noted that the fine was less than the $200 million initially sought by the Department of Justice.
The platform acknowledged the financial impact of the ongoing legal proceedings. It emphasized that this penalty marks the end of a prolonged legal battle.
Regulatory Crackdowns on Crypto Platforms
BitMEX is not the only crypto exchange facing legal actions in the U.S. Robinhood recently agreed to a $45 million settlement with the Securities and Exchange Commission. In a separate case, KuCoin’s founders were indicted for violations, including bypassing KYC requirements.
Other platforms, such as Paxful, have also faced penalties for regulatory non-compliance. These cases highlight the strict enforcement of financial laws within the cryptocurrency sector.
