BitMEX pleads guilty over bank secrecy violation


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  • BitMEX
    pleaded
    guilty
    to
    violating
    the
    Bank
    Secrecy
    Act on
    Wednesday. 

  • BitMEX
    had
    been
    operating
    in
    the
    US
    without
    establishing
    adequate
    anti-money
    laundering
    programs.

  • Founders
    may
    face
    up
    to
    five
    years
    imprisonment
    following
    the
    guilty
    plea.

BitMEX
pleaded
guilty
to
violating
the
Bank
Secrecy
Act
on
Wednesday
after
failing
to
implement
anti-money
laundering
(AML)
and
Know
Your
Customer
(KYC)
programs
on
its
platform.


BitMEX
co-founders
could
face
jail
time
after
pleading
guilty
to
charges

Damian
Williams,
the
US
Attorney
for
the
Southern
District
of
New
York,
disclosed
on
Wednesday
that
crypto
exchange
BitMEX
pleaded
guilty
to
flouting
the
Bank
Secrecy
Act.

The
exchange
refused
to
implement
robust
AML
protection
and
KYC
verification
processes
on
its
platform.
This
made
it
vulnerable
to
“large-scale
money
laundering
and
sanctions
evasion
schemes,
posing
a
serious
threat
to
the
integrity
of
the
financial
system.”

The
report
states
that
BitMEX
co-founders
Arthur
Hayes,
Benjamin
Delo,
and
Samuel
Reed
willfully
failed
to
comply
with
the
law,
knowing
that
anti-money
laundering
programs
are
a
requirement
for
crypto
companies.

“The
company
and
its
executives
knew
that
because
BITMEX
operated
in
the

United
States
,
including
by
serving
US
customers,
it
was
required
to
implement
an
AML
program
that
included
a
“know
your
customer”
(“KYC”)
component
but
chose
to
flout
those
requirements,
requiring
only
that
customers
provide
an
email
address
to
use
BITMEX’s
services,”
the
report
stated.

The
company
also
allegedly
lied
to
a
bank
regarding
the
purpose
of
a
subsidiary.
This
enabled
it
to
move
millions
of
dollars
through
the
US
financial
system.

BitMEX’s
clash
with
US
courts
dates
back
to
2020
when
the
Commodity
Futures
Trading
Commission
(CFTC)
charged
the
exchange
with
violating
regulations
regarding
AML.
The
case
resulted
in
BitMEX
paying
a
fine
of
$100
million. 

The
US
Attorney’s
Office’s
Illicit
Finance
and
Money
Laundering
Unit
will
handle
the
prosecution,
and
the
company’s
co-founders
may
face
a
five-year
prison
sentence.