Last Thursday, BitMEX found itself embroiled in both a civil and criminal case with the Commodities Futures Trading Commission (CFTC) and the Department of Justice (DOJ), respectively. 

BitMEX was hit by twin lawsuits. The CFTC accused the derivative exchange and its operators, including CEO Arthur Hayes and co-founders Ben Delo and Samuel Reed, of running an unregistered trading platform and violating anti-money laundering and know-your-customer regulations.

The DOJ filed a criminal indictment against Hayes, Delo, Reed and head of business development Greg Dwyer for allegedly violating the Bank Secrecy Act. Reed himself was arrested. 

Responding to the breaking news developments, Stephen Palley, partner at Anderson Kill, featured on this week’s episode of The Scoop to break down the nuances of the two cases. He touched on:

  • The process for litigating Bank Secrecy Act violations, and why it’s likely the BitMEX operators are likely on the hook for possible prison time
  • What this case means for the growing decentralized finance space
  • Key facts in each filing that will be impactful going forward
  • Why it’s surprising that the BitMeX domain has not been seized by law enforcement

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