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BitMEX operator plans to fight U.S. government charges, says spokesperson

Yogita Khatri
·3-min read

HDR Global Trading Limited, the parent company of crypto derivatives exchange BitMEX and one of the defendants named in Thursday's Commodity Futures Trading Commission (CFTC) civil lawsuit, has vowed to the fight the charges, according to a new statement.

A spokesperson for HDR told The Block in a statement:

"We strongly disagree with the U.S. government’s heavy-handed decision to bring these charges, and intend to defend the allegations vigorously. From our early days as a start-up, we have always sought to comply with applicable U.S. laws, as those laws were understood at the time and based on available guidance."

As The Block reported Thursday, both the CFTC and the U.S. Department of Justice — via the Southern District of New York — filed charges against the owner-operators of BitMEX, including co-founder and CEO Arthur Hayes.

The DOJ charged Hayes along with co-founders Samuel Reed and Ben Delo, as well as business development chief Greg Dwyer of violating the U.S. Bank Secrecy Act. When it announced the criminal charges, the DOJ said that Reed had been arrested in Massachusetts.

Separately, the CFTC accused BitMEX, its co-founders and a string of named businesses with a series of violations, including the failure to enforce anti-money laundering and know-your-customer rules.

Following the publication of this story, attorneys for Dwyer provided a comment to The Block. Dwyer is being represented by Sean Hecker and Jenna Dabbs, partners for Kaplan Hecker & Fink.

They told The Block:

"We are surprised and dismayed by today’s action. Our client, Greg Dwyer, who complied fully with the CFTC investigation and was never so much as invited to speak with prosecutors in the United States Attorney’s Office in Manhattan, always worked in good faith to comply with all applicable regulations and requirements, and helped BitMEX establish an international business that operated with the highest integrity. We will strongly contest these charges."

Posts on social media indicate that BitMEX is responding to the news in another way: processing withdrawal requests outside the hours it normally does.

According to BitMEX's frequently-asked-questions page, "[t]he cutoff time for Bitcoin withdrawals is 13:00 UTC. Shortly after that, Bitcoin will be sent to the address you specified." 13:00 UTC is 9 a.m. EST.

However, users of the service report that a fresh batch of withdrawals have been processed. The HDR spokesperson declined to comment further when reached.

In a blog post, BitMEX reiterated that it planned to fight the U.S. charges:

"We strongly disagree with the U.S. government’s heavy-handed decision to bring these charges, and intend to defend the allegations vigorously. From our early days as a start-up, we have always sought to comply with applicable U.S. laws, as those laws were understood at the time and based on available guidance."

BitMEX also confirmed that it conducted an "off-cycle" withdrawal process for pending requests.

"In the meantime, the BitMEX platform is operating entirely as normal and all funds are safe. To allay any potential customer concerns, pending withdrawal requests were processed at 17:45 UTC, in line with our standard procedures. We will process another off-cycle withdrawal at 08:00 UTC, 02 Oct 2020, and then 13:00 UTC, as usual," the firm said.

Editor's Note: This report has been updated with additional information.


© 2020 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.