- BitMEX pleaded guilty to violating the Bank Secrecy Act by failing to implement an adequate AML program from 2015 to 2020.
- BitMEX founders Arthur Hayes, Benjamin Delo, and Samuel Reed face up to five years in prison and significant fines for their violations.
- The case emphasizes the necessity for cryptocurrency exchanges to comply with US AML and KYC laws to operate in the US market.
According to the US Department of Justice, the BitMEX Bitcoin exchange pleaded guilty to breaking the Bank Secrecy Act, where the exchange failed to create and sustain an adequate Anti-Money Laundering (AML) system between 2015 and 2020. This fits the criminal accusations against numerous BitMEX top officials and staff members scheduled for a trial in 2022.
According to US Attorney Damian Williams, BitMEX did not run a proper AML program. Rather, it disregarded Know Your Customer (KYC) guidelines and just asked consumers to submit an email address. Arthur Hayes, Benjamin Delo, and Samuel Reed, the founders, knew their actions broke federal law. As a result, the trade became vulnerable to major money laundering and sanctions avoidance operations.
Incorporated in the Republic of Seychelles, BitMEX currently finds itself in major legal hot ground. The liable parties could be fined heavily and sentenced to up to five years in jail. A court decided in a case brought by the US Commodity Futures Trading Commission in 2022 that Hayes, Delo, and Reed owed a combined $30 million civil penalty. After confessing to breaking AML guidelines under the BSA, they were sentenced individually to probation.
This case emphasizes the need for Bitcoin firms to follow US legislation to operate within the US market. Other Bitcoin exchanges should be reminded of the need of putting strong AML policies into effect by the case against BitMEX.
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