Seychelles-based crypto exchange BitMEX has pleaded guilty to violating the US Bank Secrecy Act (BSA) between 2015 and 2020—ranging about five years of facilitating illicit activity. The exchange made zero efforts to collect users’ know-your-customer information (KYC), allowing anyone to sign up anonymously and transact on it, creating breeding grounds for laundering funds from illicit activities.
Regarding the case, Attorney Damian Williams of the Southern District of New York said, “As BitMEX’s founders and long-time employee admitted in federal court in 2022, the company, one of the leading cryptocurrency derivatives platforms in the world from 2015 to 2020, operated in the United States without any meaningful anti-money laundering program, as required by federal law.”
However, this development is not new information, as BitMEX’s co-founders, Arthur Hayes, Samuel Reed, and Benjamin Delo, alongside their first employee, Gregory Dwyer, pleaded guilty to near identical charges in 2022. The Department of Justice (DoJ) aims to leave no door unturned and hold the exchange entity responsible as well, preventing further skirting of anti-money laundering (AML) regulations in the US.
While the DoJ has not commented about why the exchange is being looked at years after its executives were tried and pleaded guilty, it might be due to its operations freely occurring with no consideration of US laws. The agency wants to prosecute it and those involved to the greatest degree.
A press release issued by the DoJ read, “Indeed, senior executives each knew that customers residing in the United States continued to access BITMEX’s trading platform through at least in or about 2018 and that BITMEX policies nominally in place to prevent such trading were toothless or easily overridden to serve BITMEX’s bottom line goal of obtaining revenue through the US market without regard to US criminal laws.”
The DoJ also alleges that BitMEX lied to an unnamed bank about its AML practices to secure a bank account, thereby funneling millions of crime-associated dollars into the US financial system.
