Plaintiffs Accused BitMEX Withdrawing $ 440 Million

Plaintiffs Accused BitMEX Withdrawing $ 440 Million After Notification Of US Investigation

HDR Global, the operator of the BitMEX crypto derivatives exchange, was sued in the spring for market manipulation and money laundering. On October 30, the plaintiffs filed additional documents in which they said that its management had taken steps to withdraw large sums after learning of the ongoing investigation and the charges being prepared by the US authorities. Writes about this The Block.

“Being well aware of the investigation by the Commodity Futures Trading Commission (CFTC) and the Department of Justice (DOJ) and the inevitability of civil and criminal charges, while preparing to abscond from the US authorities, Defendants Arthur Hayes, Ben Delo and Samuel Reed seized about $ 440,308,400 in proceeds from various criminal activities that took place on the BitMEX platform, ”the document says.

According to the plaintiffs, the distribution of proceeds of crime was carried out on October 15, November 19, 2019 and in January 2020, when the defendants received information about the ongoing investigation against them.

“The Defendants actively and deliberately removed these funds from HDR in order to make their confiscation in the course of further legal proceedings impossible. The distribution of $ 440,308,400 in just three months was clearly outside the standard HDR business, as it corresponds to an annual profit distribution of $ 1,761,233,600. HDR just doesn't make that kind of money, ”the plaintiffs add.

After initially filing a lawsuit in May, HDR said it would "actively defend itself against false claims."

Cayman Islands Seeks To Attract Crypto Companies With New Regulations

According to a statement from the Cayman Islands Ministry of Financial Services, the regulator has published an initial set of rules for cryptocurrency service operators, which took effect on October 28.

According to the ministry, this is the "first phase" of the development of rules that defines how the Cayman Islands will regulate cryptocurrency firms and enforce anti-money laundering (AML) and counter-terrorist financing (CFT) measures.

Cryptocurrency service operators already operating in the Cayman Islands or planning to do so will need to notify authorities, register with the Cayman Islands Monetary Authority (CIMA), and comply with AML / CFT rules.

The "second phase", which is due to take effect in June next year, will focus on licensing requirements and "prudential control" of cryptocurrency service providers. The Virtual Assets Bill was released last Thursday, containing provisions to facilitate the phased implementation of the new rules. It will be presented at the next meeting of the Cayman Islands Legislative Assembly.

The ministry said the new regulation will improve the government's ability to attract new organizations or individuals to register in the Cayman Islands.

ShapeShift Delisted Monero and ZCash Without Notifying Users

The ShapeShift trading platform delisted the Monero (XMR) and ZCash (ZEC) cryptocurrencies without posting any messages in connection with its decision. In addition, Dash received the status "temporarily unavailable".

According to user observations, these cryptocurrencies were presented for trading on ShapeShift a few weeks ago, but now they cannot be found in the list of available assets. XMR and ZEC differ from most other assets in the crypto market in that they offer their users increased privacy options.

ZCash has been available for exchange for ShapeShift since October 2016, that is, since the launch of the blockchain. ShapeShift CEO Eric Voorhees said at the time that ZCash "delivers on the early promises of Bitcoin technology to conduct free and private transactions with anyone in the world." “This protects the right to privacy, which belongs to all the inhabitants of the Earth, and opens up new use cases, the implementation of which is impossible without truly confidential transactions,” he said.

Over the past four years, changes have made ShapeShift no longer ready to defend its users' privacy rights. The US Department of Justice explicitly stated in October that it considers the use of private cryptocurrencies as one of the signs of a possible illegal activity. Coinbase CEO Brian Armstrong also recently reported that there is no direct ban on the listing of private cryptocurrencies, but unofficially the authorities do not recommend adding them, in order to avoid problems in the future.

Voorhees said they made the decision to delist Monero a few months ago, but he is currently unable to disclose why. Curiously, ShapeShift stopped supporting Monero once before, but brought it back in August 2019.

In September 2018, ShapeShift announced that it was abandoning the "no account exchange" model and establishing mandatory user verification.