US Court Fines BitMEX Another $100 Million. What Happened?

In the summer of 2024, the platform had previously agreed to pay a $110 million fine, but the court deemed it insufficient.

A US court has fined cryptocurrency derivatives exchange BitMEX an additional $100 million for violating the US Bank Secrecy Act, reports The Block. The exchange had previously agreed to pay a $110 million fine for this reason.

BitMEX was founded in 2014. In October 2020, US authorities charged the platform and its founders Arthur Hayes, Benjamin Delo and Samuel Reed, as well as BitMEX CEO Gregory Dwyer, with violating the law: the exchange had failed to implement the required anti-money laundering (AML) system, failed to verify customers (KYC procedure) and served US customers without registering with the Commodity Futures Trading Commission (CFTC).

All four pleaded guilty, received suspended sentences and agreed to pay fines. Subsequently, they left BitMEX. By January 2021, all users of the cryptocurrency exchange had completed the verification process.

The platform's founders admitted that they did not intentionally create or implement the required systems on the trading platform. The US Department of Justice claims this made the cryptocurrency exchange the number one platform for money laundering.

The prosecution alleged that BitMEX generated about $1.3 billion in revenue by violating US law over a five-year period, according to the report. The judge ruled that the initial $110 million fine was not sufficient punishment.

"Anti-money laundering and know-your-customer regulations protect Americans from fraud, combat money laundering and prevent terrorist financing. It is critical that all financial institutions, including cryptocurrency exchange platforms, comply with these regulations to protect our nation's economy and national security," US Attorney Matthew Podolsky told the court.

BitMEX: A Pioneer in Cryptocurrency Derivatives Trading

BitMEX was one of the first exchanges to offer derivatives on cryptocurrencies, such as futures contracts, which allow investors to make leveraged bets. According to CoinGecko, as of 16 January, BitMEX has a daily derivatives trading volume of about $816 million. The platform offers 224 trading pairs, of which the BTC/USD pair accounts for more than $552 million in trading volume.

Arthur Hayes, one of the founders of BitMEX, remains one of the most controversial figures in the cryptocurrency market. He is known for his lengthy essays on the topic of cryptocurrencies in the global economy, as well as his bold predictions.

In mid-December 2024, he stated that he expects the cryptocurrency market to fall in the days leading up to Donald Trump's inauguration, scheduled for 20 January. He bases his prediction on the fact that Trump will fail to deliver quickly on his promises and, realising this, cryptocurrency investors will start selling assets out of disappointment.