BTC did not resist the CFTC's announcement of civil action against the Seychelles-based exchange BitMEX.
In short, the owners of BITMEX the crypto exchange face several costs.
Since the news broke, the price of Bitcoin has rapidly dropped by around $ 500.
However, some believe that the long-term value of Bitcoin will not be damaged.
The US Commodity Futures Trading Commission (CFTC) today filed a civil action against the crypto exchange BitMEX, the fifth largest crypto derivatives platform in the world by volume, according to CoinGecko.
The charges relate to the operation of an unregistered trading platform, as well as violations of several regulations, including failure to comply with anti-money laundering procedures.
Among those indicted in the CFTC civil action are Arthur Hayes, Ben Delo and Samuel Reed. All three people own BitMEX.
"NEW YORK (Reuters) - U.S. prosecutors on Thursday filed criminal charges accusing four founders and executives of the BitMEX cryptocurrency derivatives exchange of failing to take sufficient steps to stop money laundering.
The U.S. Department of Justice charged Arthur Hayes, Benjamin Delo and Samuel Reed, who together founded BitMEX in 2014, and Gregory Dwyer, its first employee and later head of business development, with violating the Bank Secrecy Act and conspiring to violate that law.
Reed has been arrested in Massachusetts, while the other defendants are at large, the Justice Department said. The defendants' lawyers could not immediately be identified. Hayes is also BitMEX's chief executive and Reed its chief technology officer.
According to court papers, the defendants knew that because BitMEX served U.S. customers, it was supposed to implement an anti-money laundering program that included a "know your customer" requirement.
But prosecutors said the defendants instead took "affirmative steps" to evade those requirements, including by incorporating BitMEX and affiliates in the Seychelles, which they believed had less stringent regulations.
The U.S. Commodity Futures Trading Commission filed a separate civil lawsuit seeking to halt BitMEX's commodity derivatives business in the United States. "
Following the news, the price of Bitcoin fell rapidly.
According to the prices on Binance, the cryptocurrency lost around $ 500 within minutes. Bitcoin declined from a 24-hour high of $ 10,920 to around $ 10,500, also falling to a 24-hour low of $ 10,437.
“I'm not surprised that the price has fallen in the short term, this is exactly the sort of thing that scares new or inexperienced investors and can drastically affect confidence in the short term,” said Jason Deane, Bitcoin analyst at Quantum. Economics, at Decrypt.
While it might not come as a surprise that Bitcoin suffered a short-term decline in the wake of this news, it remains to be seen whether Bitcoin takes long-term damage to its value.
In fact, from a long-term and global perspective, many see this as a good thing as Bitcoin (and the services provided by organizations such as BitMEX) go through the process of working with regulators, ” Deane said.
Nevertheless, it should be noted that if US regulators succeed in shutting down BitMEX, it could have big consequences for the market. According to CoinMetrics data posted on Twitter, BitMEX has around $ 2 billion worth of Bitcoin in their vaults.
