BitMEX, a popular cryptocurrency exchange platform, has admitted to violating the Bank Secrecy Act, as reported by the Department of Justice (DOJ) in a recent press release. The DOJ revealed that BitMEX, which was established by crypto entrepreneur Arthur Hayes in 2014, failed to establish and maintain an adequate anti-money laundering (AML) protocol, thus breaking the law.
BitMEX and its executives were accused of intentionally not registering with the Commodity Futures Trading Commission (CFTC), neglecting to implement an AML program, and bypassing mandatory know your customer (KYC) laws. The company and its executives were aware that operating in the United States required an AML program with a KYC component. However, they chose to ignore these requirements and only requested customers to provide an email address to use BitMEX’s services.
Senior executives at BitMEX were fully aware that customers from the United States continued to access the platform, even up until 2018, despite nominal policies aimed at preventing such trading. These policies were ineffective and easily overridden to serve BitMEX’s own financial interests.
U.S. Attorney Damien Williams emphasized that BitMEX’s disregard for the law posed a significant threat to the integrity of the U.S. financial system. By allowing large-scale money laundering and sanctions evasion schemes, BitMEX became a vehicle for illicit activities. The guilty plea made by BitMEX highlights the importance for cryptocurrency companies to comply with U.S. regulations if they want to operate in the U.S. market.
The press release also outlined that violating the Bank Secrecy Act can result in a maximum penalty of five years in prison and a fine. In August 2022, BitMEX executive Gregory Dwyer also pleaded guilty to similar violations of the Bank Secrecy Act. Dwyer confessed to willfully failing to establish, implement, and maintain an anti-money laundering program at BitMEX.
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