BitMEX pleads guilty to Bank Secrecy Act violation

Officials with the US Department of Justice announced that cryptocurrency exchange BitMEX pleaded guilty to violating the Bank Secrecy Act (BSA) by operating without “any meaningful” Anti-Money Laundering (AML) program.

In a July 10 notice, US Attorney Damian Williams said BitMEX “willfully fail[ed] to establish, implement, and maintain” an adequate AML program from 2015 to 2020. The charges seem to result from testimony during 2022 criminal proceedings against some of the exchange’s founders and employees.

“BitMEX opened itself up as a vehicle for large-scale money laundering and sanctions evasion schemes, posing a serious threat to the integrity of the financial system,” said Williams. “Today’s guilty plea indicates again the need for cryptocurrency companies to comply with US law if they take advantage of the US market.”

Source: US Justice Department

According to the US Attorney, BitMEX “flaunted” AML requirements by not implementing an AML program with Know Your Customer standards and instead asking users to provide an email address. Founders Arthur Hayes, Benjamin Delo, and Samuel Reed knew that the requirement affected US-based users in violation of federal law. 

BitMEX, or HDR Global Trading Limited, is incorporated in the Republic of Seychelles. Responsible parties at the exchange could face up to five years in prison and a fine.

Related: AI-driven crypto crime is only just beginning — Elliptic report

In 2022, a court ordered Hayes, Delo and Reed to pay a combined $30 million civil penalty in a case brought by the US Commodity Futures Trading Commission. The trio were sentenced separately to probation in 2022 after pleading guilty to violating AML requirements under the BSA.

US courts are also preparing to sentence individuals connected to defunct cryptocurrency exchange FTX and Alameda Research following guilty pleas. Starting in October, Judge Lewis Kaplan in the Southern District of New York will consider whether to send FTX co-founder Gary Wang and former engineering director Nishad Singh to prison. Former CEO Sam Bankman-Fried is serving a 25-year sentence following a trial and conviction.

Magazine: Crypto-Sec: Phishing scammer goes after Hedera users, address poisoner gets $70K

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