Crypto Exchange BitMEX pleads Guilty to Bank Secrecy Act violations from 2015 to 2020

BitMEX has pleaded guilty to Bank Secrecy Act (BSA) violations. The Federal Bureau of Investigation's (FBI) Christie M. Curtis, Acting Assistant Director in Charge of the New York Field Office, and United States Attorney for the Southern District of New York, Damian Williams, said in the statement that BitMEX has entered a guilty plea to charges of violating the Bank Secrecy Act by knowingly failing to create, carry out, and maintain a sufficient anti-money laundering (AML) program. John G. Koeltl, U.S. District Judge, has been assigned the case, the post added. 

According to U.S. Attorney Damian Williams, BitMEX founder and longtime employee admitted in 2022 at the Federal Court that the exchange operated in the United States from 2015 to 2020 without any significant AML program, as mandated by federal law. This made BitMEX vulnerable to being used as a platform for massive money laundering and sanctions evasion operations, which was extremely dangerous for the stability of the financial system. The guilty plea today serves as further evidence that cryptocurrency businesses that wish to capitalize on the United States market must adhere to the law in the country. 

BitMEX only required lenient service access credentials and deliberately ignored nationally mandated anti-money laundering procedures meant to protect the US financial markets against dishonest actors and transactions in order to increase its earnings, according to FBI Acting Assistant Director Christie M. Curtis. 

The FBI's unwavering commitment to upholding compliance with all financial laws in the United States, safeguarding the financial system, and prosecuting those who seek to create a workaround for financial gain is reflected in today's plea. 

BitMEX was founded in or around 2014 by Arthur Hayes, Benjamin Delo, and Samuel Reed. Gregory Dwyer joined the company as its first employee in 2015 and eventually rose to the position of Head of Business Development. In order to operate through U.S. offices and to service and solicit business from U.S. traders, BitMEX was obliged to register with the Commodities Futures Trading Commission (CFTC) and to set up and maintain a sufficient anti-money laundering program. 

AML programs safeguard the integrity of the American financial system as well as national security in general by ensuring that financial institutions like BITMEX are not used for illegal purposes, as per the claims presented in the information, along with additional documents and declarations presented in court. 

The company and its executives were aware that BitMEX was obliged to implement an AML program with a "know your customer" (or "KYC") component because it operated in the United States and served U.S. customers. However, the company chose to ignore these requirements by merely requiring customers to provide their email address in order to use BitMEX's services. 

BitMEX purposefully misled a bank about the nature and goal of a subsidiary in order to get permission to launder millions of dollars through the American financial system, as part of their deliberate circumvention of AML regulations in the United States, the post added.

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