One of the world’s biggest crypto exchanges agrees to pay $100 million and block US users as part of a legal settlement

• BitMEX, one of the world’s largest crypto exchanges, agreed to pay $100 million and block American users in a settlement with the CFTC, according to a report by the Wall Street Journal.
• The suit brought by the CFTC alleged that BitMEX failed to either enforce US rules or comprehensively block American users from its platform.
• The exchange also facilitated upwards of $200 million in transactions with “darknet” markets, hotbeds of illicit drug trafficking and computer hacking, according to FinCEN.
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BitMEX, one of the world’s largest crypto exchanges, agreed to pay $100 million and block American users in a settlement with the Commodities Futures Trading Commission, according to a report by the Wall Street Journal.

The suit brought by the CFTC alleges that BitMEX failed to either enforce US rules or comprehensively block American users from its platform.

If the exchange operates in the US, BitMEX’s key offering of crypto swaps is subject to CFTC registration and oversight, the agency said. But because BitMEX’s customers were easily able to sidestep filters meant to block Americans from the platform, the exchange was in violation of US law.

The exchange also facilitated upwards of $200 million in transactions with “darknet” markets, hotbeds of illicit drug trafficking and computer hacking, according to FinCEN, the enforcement arm of the Treasury Department.

BitMEX has neither admitted nor denied the allegations and said that it is “committed to becoming a regulated exchange,” according to the Journal.

A separate criminal proceeding against BitMEX’s co-founders is still pending, related to alleged failures to enforce an effective anti-money laundering program. BitMEX CEO Arthur Hayes has posted a $1.5 million cash bail to remain at his home base in Singapore as the US criminal charges work their way through the courts.

Founded in 2014, BitMEX is a top purveyor of crypto derivatives and leveraged spot trading. Transaction volume on the platform plunged on the news, knocking it out of the top 10 derivative exchanges, according to data from CoinMarketCap.

The CFTC settlement comes as regulators escalate enforcement efforts on crypto businesses. On Monday, crypto exchange Poloniex reached a $10 million settlement with the Securities and Exchange Commission, which accused it of selling unregistered securities.