BitMEX Faces Legal Setback with Guilty Plea in Money Laundering Case

BitMEX Faces Legal- Company Found Guilty of Ignoring AML Regulations, DOJ Announces

BitMEX Faces Legal- Officials from the US Department of Justice have announced that the cryptocurrency exchange BitMEX has pleaded guilty to violating the Bank Secrecy Act (BSA). The exchange admitted to operating without implementing any meaningful Anti-Money Laundering (AML) program.

In a statement released on July 10, US Attorney Damian Williams stated that from 2015 to 2020, BitMEX willfully failed to establish, implement, and maintain an adequate AML program. These charges stem from testimony given during the 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 underscores the necessity for cryptocurrency companies to comply with US law if they wish to operate within the US market.

BitMEX Founders Face Legal Consequences for AML Violations

According to the US Attorney, BitMEX flaunted AML requirements by failing to implement a proper AML program with Know Your Customer (KYC) standards. Instead, they only asked users to provide an email address. Founders Arthur Hayes, Benjamin Delo, and Samuel Reed were aware that this practice violated federal law, particularly affecting US-based users.

BitMEX, formally known as HDR Global Trading Limited, is incorporated in the Republic of Seychelles. The responsible parties at the exchange could face up to five years in prison and hefty fines. 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. Each of the trio was sentenced separately to probation in 2022 after pleading guilty to violating AML requirements under the BSA.

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

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