BitMEX, a cryptocurrency exchange based in Seychelles, has admitted to breaking the Bank Secrecy Act, as reported by the U.S. Department of Justice. The exchange neglected to establish a proper know-your-customer (KYC) and anti-money laundering (AML) program from September 2015 to September 2020. During this time, the Commodity Futures Trading Commission (CFTC) accused BitMEX of providing illegal cryptocurrency derivative trading services to customers in the United States.
BitMEX allowed users to sign up and trade cryptocurrencies anonymously without providing any personal information. The exchange promoted itself as a platform where individuals could trade without undergoing real-name verification. Due to the lack of AML and KYC measures, BitMEX became a hub for money laundering and violating sanctions.
U.S. Attorney Damian Williams stated that BitMEX operated without a sufficient anti-money laundering program, making it vulnerable to large-scale money laundering and sanctions evasion activities. He emphasized the importance of cryptocurrency companies complying with U.S. laws when operating in the American market.
The founders and an employee of BitMEX, including Arthur Hayes, Samuel Reed, Benjamin Delo, and Gregory Dwyer, faced charges similar to those the company pleaded guilty to. Additionally, BitMEX admitted to deceiving an international bank by providing false information to secure a bank account for a shell company controlled by Delo, with BitMEX as the beneficial owner.
It remains unclear why charges were brought against BitMEX as a company four years after its executives faced similar allegations. The sentencing for BitMEX is pending, with the case under the jurisdiction of U.S. District Judge John G. Koeltl in the Southern District of New York.
Despite requests for comments, BitMEX representatives have not responded to inquiries from CoinDesk. The exchange’s actions highlight the importance of adhering to financial regulations and implementing robust AML and KYC procedures in the cryptocurrency industry. Such compliance is essential to safeguard the integrity of the financial system and prevent illicit activities within the market.
