The US Department of Justice recently said that BitMEX, a cryptocurrency exchange, had pleaded guilty to breaking the Bank Secrecy Act (BSA) by not having a strong Anti-Money Laundering (AML) program.
The US attorney for the Southern District of New York said on July 10 that BitMEX “willfully failed to establish, implement, and maintain” a good anti-money laundering program from 2015 to 2020. This happened because of what people said during the criminal cases in 2022 against some of the exchange’s founders and workers.
BitMEX guilty of violations
“BitMEX turned into a way for large-scale schemes to launder money and avoid sanctions, which is a major threat to the stability of the financial system,” Williams said. “Today’s guilty plea shows that cryptocurrency companies must follow US law if they want to do business in the US market.”
Williams says BitMEX openly disregarded AML rules by not putting in place an AML program that met Know Your Customer (KYC) standards. Instead, they only asked users for their email addresses. Arthur Hayes, Benjamin Delo, and Samuel Reed, who started the company, knew that this requirement was not enough for people in the US, which was against federal law.
The Republic of Seychelles is where BitMEX, whose full name is HDR Global Trading Limited, is based. People who were involved in the exchange could get up to five years in jail and a significant fine.
In 2022, the US Commodity Futures Trading Commission brought a case against Hayes, Delo, and Reed. The court ordered them to pay a $30 million civil penalty. After admitting that they broke the BSA’s AML rules, the three were given probation in 2022.
At the same time, US judges are getting ready to sentence people who had ties to the now-defunct cryptocurrency exchange FTX and Alameda Research after they pleaded guilty.
Starting in October, Judge Lewis Kaplan of the Southern District of New York will decide if co-founder Gary Wang and former engineering director Nishad Singh should go to jail. Sam Bankman-Fried, who used to be CEO, is currently serving a 25-year sentence after being found guilty.
