On May 5, 2022, the CFTC announced that the US District for the Southern District of New York (SDNY) entered consent orders against each co-founder of offshore Seychelles-based cryptocurrency derivatives trading platform Bitcoin Mercantile Exchange (BitMEX) arising from the CFTC's October 1, 2020 complaint against BitMEX for illegally receiving funds from customers and taking orders for cryptocurrency trades in violation of the Commodity Exchange Act (CEA) and CFTC regulations, as well as related anti-money laundering (AML) violations.

According to the CFTC, although BitMEX claimed to be an offshore exchange, US customers were able to access the BitMEX platform and conduct cryptocurrency derivatives trading without appropriate customer due diligence. Notwithstanding BitMEX's public representation that its platform was not conducting business with US persons, BitMEX allegedly failed to implement appropriate policies and actions to prevent US customers from accessing the exchange and even sought out US customers without CFTC approval or registration. The CFTC alleged that one co-founder altered US customer information to hide the customer's true location. In 2021, the CFTC and FinCEN reached settlements with BitMEX regarding related charges (see Legal Update, CFTC and FinCEN Settle Charges Against Offshore Cryptocurrency Derivatives Exchange BitMEX).

The co-founders were each assessed a $10 million civil monetary penalty and each is enjoined from further violating the Commodity Exchange Act (CEA) and CFTC regulations.