Questions of which, if any, regulatory regimes apply to the variety of participants in the cryptocurrency market continue to dog the industry. On February 28, 2022, whether a cryptocurrency futures trading platform constitutes a “futures commission merchant” (“FCM”) under the Commodity Exchange Act (“CEA”) subject to Bank Secrecy Act (“BSA”) regulations took center stage in a U.S. District Court decision denying a motion to dismiss an indictment alleging violations of the BSA against the founders and chief executives of BitMEX.
As we will discuss, the District Court for the Southern District of New York rejected a motion to dismiss the indictment, in which the defendants argued that they lacked notice under the Due Process Clause of the Fifth Amendment that they could face criminal charges based on two technical questions, the answers to which were “unknowable” at the relevant time: (1) whether Bitcoin is a “commodity;” and (2) was BitMEX an FCM brokering cryptocurrency futures.
Continue Reading Cryptocurrencies as Commodities Plays Out in BitMEX Criminal Prosecution Under the BSA