On Wednesday, Arthur Hayes’s BitMEX, a Seychelles-based cryptocurrency exchange admitted to breaking the Bank Secrecy Act (BSA), according to an announcement by the U.S. Department of Justice (DOJ). The exchange also failed to implement necessary know-your-customer (KYC) and anti-money laundering (AML) programs between September 2015 and September 2020.
BitMEX guilty of breaking the Bank Secrecy Act
During this period, the Commodity Futures Trading Commission (CFTC) charged BitMEX with offering illegal crypto derivative trading services to U.S. customers. Simultaneously, the DOJ charged four BitMEX employees with BSA violations.
They allowed users to trade cryptocurrencies without providing identification or verification, promoting itself as a platform for anonymous trading. This lack of regulation made it a hotspot for money laundering and sanctions violations during those days between 2015 and 2020.
U.S. Attorney Damian Williams highlighted that BitMEX, once a leading crypto derivatives platform, operated in the U.S. without an effective AML program, which is required by federal law. This oversight allowed the exchange to become a vehicle for large-scale money laundering and sanctions evasion, threatening the financial system’s integrity. Williams highlighted the necessity for cryptocurrency companies to comply with U.S. laws if they wish to operate within the U.S. market.
In addition to the BSA violations, BitMEX admitted to making false statements to an international bank. These false claims were made to open a bank account for Shine Effort Inc. Limited, a shell company controlled by co-founder Benjamin Delo. BitMEX was the beneficial owner of this account.
Charges against BitMEX co-founder and employee in 2020
The 2020 charges against BitMEX’s co-founders Arthur Hayes, Samuel Reed, and Benjamin Delo, and its first employee, Gregory Dwyer, are similar to the current charges against the company. All four executives have previously pleaded guilty.
The case, presided over by U.S. District Judge John G. Koeltl of the Southern District of New York, has not yet reached sentencing. A BitMEX representative did not respond to requests for comment. This guilty plea highlights the importance of regulatory compliance for cryptocurrency platforms operating in the U.S.
Following all these things, the market remained stable, whereas top crypto assets like Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and BNB(BNB) had a decent price drop in the last 24 hours. According to coinmarketcap, in the last 24 hours BTC, ETH, SOL, and BNB have experienced a price drop of 2%, 0.15%, 1.8%, and 0.5% respectively.