Samuel Reed, CTO of BitMEX, who was one of those indicted by the US Department of Justice on October 1, has been released from his arrest after posting a $ 5 million bond.
Reed’s bail was approved on October 3, on the condition that he appear for court proceedings and, if convicted, surrender to serve a sentence. In the process, the authorities seized his and his wife’s passports.
The court hearing took place on October 1 by videoconference. Attorney William J. Trach of Latham & Watkins LLP Reed is in charge of Reed´s representation.
Reed, 31, was arrested in Massachusetts for alleged violation of the Bank Secrecy Act and for “willfully failing to establish, implement and maintain an adequate anti-money laundering (‘AML’) program on the Mercantile Exchange of Bitcoin or ‘BitMEX’ “.
New faces on board
Reed was indicted along with co-founders and colleagues Arthur Hayes, Benjamin Delo, and Gregory Dwyer, who remain at large at the same time BitMEX announced that the four executives have stepped down from their positions in light of the US government’s allegations.
BitMEX was the subject of two lawsuits on October 1, by the Commodity Futures Trading Commission (CFTC) and the US Department of Justice. The CFTC accused the derivatives exchange and its operators of running an unregistered trading platform as well as violating anti-money laundering and “know your customer” rules.
HDR Global Trading, BitMEX’s parent company named in the CFTC lawsuit, promised to fight the charges at the time.
BitMEX maintained that for the exchange the current situation is “business as usual” (the usual), but the withdrawals of Bitcoin, the open interest in its futures, and the volumes show a very different picture. More than 40,000 bitcoins, currently worth about $ 440 million, have been withdrawn from BitMEX, according to various data trackers.
Open interest in the BitMEX futures market crashed and fell from more than $ 1 billion to less than $ 600 million. Trading volumes also dropped sharply and it is unknown what future the exchange could expect if it is found guilty.
The CFTC stated that BitMEX is responsible for the execution of unauthorized commercial operations, illegally offering commercial assets, not appearing as an authorized merchant, and not executing the regulations established for this kind of operations and movements.
“BitMEX was touted as the world’s largest crypto derivatives trading platform, with billions of dollars in daily transactions. A lot of that volume comes from markets and customers resident in the US, the platform never got registered with the CFTC and did not adjust itself to the law, which is essential to guarantee the integrity and vitality of local markets ”.
The CFTC had an open investigation into BitMEX since June 2019, in which they were investigating several of the charges raised in the recently filed lawsuit. When reports about the investigation conducted last year circulated, the platform recorded the withdrawal of $73 million in BTC funds in just 24 hours.
By: Jenson Nuñez.