The settlement reached by BitMEX and the US Commodity Futures Trading Commission, (CFTC), and the Financial Crimes Enforcement Network, (FinCEN) was announced Tuesday. BitMEX will pay a $100m civil penalty. The fine is in response to allegations that BitMEX's derivatives exchange permitted illegal trades and violated anti money laundering laws.BitMEX failed to address the less-savory uses of its platform over the years. FinCEN claims that BitMEX willfully failed its obligations under the Bank Secrecy Act (BSA).BitMEX has failed to establish and maintain an anti-money laundering and customer identification program that is compliant for more than six years. It also failed to report suspicious activity.FinCEN claims that these issues exposed financial entities to unnecessary risks due to BitMEX's inability to collect more information than an email address. This was from 2014 to 2020. FinCEN claims that senior BitMEX leadership intentionally altered customer information in order to conceal customers' true location.BitMEX was first investigated by the CFTC in 2020. The Department of Justice charged BitMEX that its founders ran the exchange outside of the US, and illegally accepted orders and funds from U.S. customers to trade cryptocurrencies including derivatives on bitcoin and ether.It is a good idea to be investigated by the government.BitMEX's announcement of its intention to pay did not confirm CFTCs claims, FinCENs concerns about the BSA, or address the criminal charges against BitMEX's founders. According to BitMEX CEO Alexander Hptner, however, everything appears to be in order at BitMEX. Hptner writes that putting this legal issue with the CFTC/FinCEN behind us will only accelerate and put us on the right track.The company will have to hire an independent consultant as part of the settlement to review its transactions and to revise its policies and procedures. BitMEX doesn't seem to have any other choice than to follow the right path.BitMEX's dispute with regulators was just one example of the US government's increasing focus on cryptocurrency regulation. The sin of BitMEX concealing transactions is being rectified with more permanent measures. FinCEN proposed regulations that crypto wallets must be linked to transactions of certain size. Members of the US Securities and Exchange Commission called for more power to regulate crypto trading.
