Category: derivatives

BitMEX Founder Ben Delo Surrenders to US Authorities, released on $20M bond

BitMEX Founder Ben Delo Surrenders to US Authorities, released on $20M bond

One of the founders of the cryptocurrency derivatives exchange BitMEX surrendered to U.S. authorities to face charges of violating the Bank Secrecy Act on Monday.

Ben Delo traveled from the U.K. to the U.S. and appeared before Magistrate Judge Sarah L. Cave in a remote proceeding where he pleaded not guilty, according to public court records.

He was subsequently released on a $20 million bail bond, on Monday, with a status conference set for May, according to court records. Bloomberg further reported that Delo will be allowed to return to the UK under the terms of his bail.
Delo, alongside BitMEX co-founders Arthur Hayes and Samuel Reed, were charged with violating the BSA and conspiracy to violate the BSA last October by the U.S. Department of Justice and Commodity Futures Trading Commission.

BitMEX’s first employee, Gregory Dwyer, was also charged.

Under the BSA, financial institutions are required to provide documentation to regulators with transactions above $10,000. Its stated purpose is to prevent criminals from laundering large sums of cash at banks and elsewhere.

“The charges against Ben are unfounded and represent unwarranted overreach by the U.S. authorities,” Rachel Miller, a spokesperson for Delo, told Bloomberg. “Ben intends to defend himself against the charges and clear his name in court.”
Earlier this month, Jessica Greenwood, an assistant U.S. attorney for the Southern District of New York, said she had been in talks with Hayes’ lawyers. Court documents show Greenwood claimed to “have discussed with counsel how to arrange for a voluntary surrender” for Hayes and for an agreement to appear remotely or come to New York “as needed.”

Source – Coindesk  

Binance probed by CFTC over US resident ‘unregistered’ derivative trading

Binance Probed by CFTC Over US resident 'unregistered' derivative trading

Binance Holdings Ltd., the largest cryptocurrency exchange, is being investigated by the Commodity Futures Trading Commission over concerns that it allowed Americans to place wagers that violated U.S. rules, according to people familiar with the matter.

The CFTC is seeking to determine whether Binance, which isn’t registered with the agency, permitted U.S. residents to buy and sell derivatives that the regulator polices, said the people, who asked not to be identified because the probe is confidential. Binance, which has an office in Singapore but says it lacks a single corporate headquarters, hasn’t been accused of misconduct and the investigation may not lead to an enforcement action.

The scrutiny is the latest sign that market watchdogs may thwart the crypto industry’s ambitions of becoming more mainstream for U.S. investors. The CFTC considers virtual currencies like Bitcoin and Ether to be commodities and claims jurisdiction over their futures and other derivatives. That means crypto platforms face strict customer protection and oversight demands if Americans are trading on them — regardless of where exchanges are based.

Binanance co-founder Changpeng Zhao said Friday that the company closely follows American rules and has strong controls to prevent its customers from laundering funds. Speaking during an event on the social media platform Clubhouse, he declined to comment on whether the CFTC is investigating Binance.

“We’ll continue to improve our compliance,” Zhao said. “We’ll also work very actively with regulators around the world to improve the compliance standards of the industry.”
Binance said in an earlier statement Thursday that it blocks U.S. residents from its website and uses advanced technology to analyze deposits and withdrawals for signs of illicit transactions. Binance takes its compliance obligations “very seriously,” the company said. The CFTC declined to comment.

Bitcoin fell after news of the Binance investigation was reported. It was down 1.6% to $56.685.02 as of 4:17 pm New York time.

Source – Bloomberg  News