BitMEX Admits Guilt in Bank Secrecy Act Violation

• The US Department of Justice said today that BitMEX entered a guilty plea to operate without “any meaningful” AML program in violation of the BSA.
• The requirement’s impact on US-based users was known to the founders, Arthur Hayes, Benjamin Delo, and Samuel Reed, as illegal under federal law.

The US Department of Justice said today that BitMEX, a crypto exchange, entered a guilty plea to operate without “any meaningful” Anti-Money Laundering (AML) program in violation of the Bank Secrecy Act (BSA).

US Attorney Damian Williams stated in a notice dated July 10 that BitMEX deliberately neglected to create, carry out, and uphold a sufficient anti-money laundering program between 2015 and 2020. The accusations appear to be the product of testimony given against some of the exchange’s founders and staff members in criminal proceedings in 2022. Williams stated:

“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,”

The US Attorney claims that BitMEX “flaunted” AML regulations by requesting customers to submit their email addresses rather than putting in place an AML program that adheres to Know Your Customer guidelines. The requirement’s impact on US-based users was known to the founders, Arthur Hayes, Benjamin Delo, and Samuel Reed, as illegal under federal law. 

HDR Global Trading Limited, often known as BitMEX, is a Republic of Seychelles corporation. Those who caused the transaction could be fined and imprisoned for up to five years.

In a case initiated by the US Commodity Futures Trading Commission, a judge in 2022 ordered Hayes, Delo, and Reed to pay a total of $30 million in civil penalties. After entering guilty pleas to breaking AML regulations under the BSA, the three were each given a separate probationary sentence in 2022.

Following guilty pleas, US courts are also getting ready to jail people associated with the now-defunct crypto exchanges FTX and Alameda Research. 

Judge Lewis Kaplan of the Southern District of New York will begin deliberating in October over the potential jail sentences for FTX co-founder Gary Wang and former engineering director Nishad Singh. SBF, the former CEO, was found guilty and sentenced to 25 years in prison.

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