BitMEX Pleads Guilty to Bank Secrecy Act Violations

Crypto exchange BitMEX has pleaded guilty to violating the Bank Secrecy Act. The plea was made before U.S. District Judge John G.Koeltl, acknowledging serious deficiencies in its anti-money laundering (AML) protocols.

U.S. Attorney Damian Williams emphasized that from 2015 to 2020, BitMEX operated in the U.S. market without implementing the federally mandated AML measures. This lapse endangered the financial system through activities such as money laundering and sanctions evasion. Williams stressed that cryptocurrency platforms must follow U.S. laws to operate in the American markets.

According to the charges, BitMEX, incorporated in the Republic of Seychelles as HDR Global Trading Limited, was required to register with the Commodity Futures Trading Commission and maintain an AML program due to its operations in the United States.

The exchange only required an email address from its users, bypassing crucial Know Your Customer (KYC) standards. BitMEX’s founders, Arthur Hayes, Benjamin Delo, and Samuel Reed, were reportedly aware that U.S.-based customers continued to access the platform, violating federal law.

BitMEX is charged with one count of breaking the Bank Secrecy Act. This could lead to a maximum of five years in prison and fines, making it clear that such compliance failures are severe. Christie M. Curtis from the FBI pointed out that the lax requirements at BitMEX directly violated U.S. financial regulations, impacting the integrity of the financial market.

Also read: BitMEX Moves $800 Million in Bitcoin, Impacting Markets