BitMEX Admits Bank Secrecy Act Violation

BitMEX admits to Bank Secrecy Act violation. BitMEX co-founders Hayes, Delo, and Reed pleaded guilty to similar criminal charges in 2022 and received probation.

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

BitMEX “willfully failed” to establish, implement, and sustain an adequate AML program from 2015 to 2020, according to a July 10 notice from US Attorney Damian Williams.

I believe the allegations result from testimony during criminal proceedings in 2022 against a few of the exchange’s founders and employees.

“BitMEX has become a conduit for large-scale money laundering and sanctions evasion schemes, which poses a significant threat to the integrity of the financial system,” stated Williams. “Today’s guilty plea serves as another reminder that cryptocurrency companies must adhere to US law to capitalize on the US market.”

According to the US Attorney, BitMEX “flaunted” AML requirements by not implementing an AML program with Know Your Customer standards and instead requesting that users provide an email address.

Arthur Hayes, Benjamin Delo, and Samuel Reed, the founders, were aware that the requirement violated federal law by impacting consumers based in the United States.

BitMEX, or HDR Global Trading Limited, is a company that is registered in the Republic of Seychelles. The exchange’s responsible parties may be subject to a fine and a maximum sentence of five years in prison.

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

Additionally, US courts are preparing to sentence individuals associated with the defunct cryptocurrency exchange FTX and Alameda Research in the wake of their guilty pleas.

Judge Lewis Kaplan in the Southern District of New York will evaluate whether to imprison FTX co-founder Gary Wang and former engineering director Nishad Singh beginning in October. Sam Bankman-Fried, the former CEO, is currently serving a 25-year sentence due to his conviction and trial.