Following CFTC Charges, BitMEX Announces Surveillance Partnership

The announcement comes as the crypto exchange battles with the US Commodity Futures Trading Commission (CFTC) on charges of running an unregistered trading platform and violating AML and know-your-customer (KYC) regulations. Following the CFTC’s civil filing in the U.S. District Court for the Southern District of New York on Oct 1, BitMEX CEO Arthur Hayes stepped down from his position, alongside CTO Samuel Reed and co-founder Ben Delo. The new partnership signals a change of strategy at BitMEX, which under Hayes’s leadership built a reputation as the wild west of large crypto trading platforms.

Eventus Systems to provide trade surveillance, AML transaction monitoring for BitMEX

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— IAM Platform (@IAM__Network) November 12, 2020

The Post-Hayes Era: Regulatory Compliance Uber Alles

BitMEX stated via its website on Nov 12, that the new partnership intends to expand the platform’s ability to monitor trades and hence “screen out bad actors,” as well as boost its AML capacity. In a sharp departure from its prior position on issues of regulatory compliance and customer security, the statement contained references to “proactive monitoring” and a “safe and secure trading environment.” Previously under Hayes, the platform’s position was significantly less conciliatory toward regulators, often holding a hard stance against US financial jurisdiction and the attitude of financial regulators toward crypto. Hayes famously wrote in 2018 that bitcoin is not used to facilitate money laundering, effectively arguing against the need for AML regulation to be enforced on all crypto trading platforms.

Hinting at BitMEX’s enforced change of direction, 100x Group Chief Compliance Officer Malcolm Wright said:

“The selection of Eventus to support our critical trade surveillance and AML functions is an important part of our plans to mature our compliance capabilities, with a vision of leading the industry on best practice crypto-asset compliance. Eventus has extensive expertise and experience not only with digital asset exchanges but also within the traditional financial sector. ”

Eventus Validus Comes to BitMEX

According to Eventus Systems, Validus is a monitoring, risk management, compliance, and reporting solution that provides full-service trade surveillance and market risk services to enterprise-level trading operations.

Its risk management suite includes platform alerts, internal analytics, reconciliation, risk limits, and surveillance among others.