On 1 October 2020 the US Commodity Futures Trading Commission filed a civil action in the Southern District of New York (release 8270-20) against BitMEX’s operating entities and founders Arthur Hayes, Ben Delo and Samuel Reed: unregistered platform, acting as a futures commission merchant, retail leveraged commodity transactions, and no real KYC/AML programme, in the Commission’s telling. The same day the US Attorney’s Office for SDNY unsealed a criminal indictment against Hayes, Delo, Reed and Gregory Dwyer for conspiring to violate the Bank Secrecy Act. Reed was arrested in Massachusetts. The others were not in custody that afternoon.
March’s Black Thursday liquidations on this venue are a different URL. A later plea and fine are later. This page is the charging day.
What happened
BitMEX sold bitcoin perpetual swaps with leverage up to 100 to 1 from a Seychelles stack while, prosecutors say, US persons could still get on. High leverage is how a shop turns a 10% print into a blown account. Registration and SARs are how the US says a derivatives venue is supposed to behave. Neither fact is Bitcoin’s consensus.
Why it matters
If you traded on BitMEX, you were a customer of that company, including its liquidation engine and its compliance culture. If you only hold spot coins in a wallet, a derivatives indictment is legal weather. See how buying crypto actually works. See the March liquidation piece if you need the engine, not the docket.
What happens next
Arrests, KYC suddenly appearing, and a long case. We will not treat a charging document as a bitcoin thesis. Nothing here is legal advice, and it is not an instruction to trade, or to buy or sell bitcoin.
