BitMEX pleads guilty to violating the Bank Secrecy Act in anti-money laundering case
Quick Take
- The U.S. Attorney for the Southern District of New York announced that cryptocurrency exchange BitMEX pled guilty to violating the Bank Secrecy Act.
- The exchange willfully failed to establish, implement, and maintain an adequate anti-money laundering program, according to a statement.
Crypto exchange and derivative trading platform BitMEX pled guilty Wednesday to violating the Bank Secrecy Act, according to a statement from the U.S. Attorney for the Southern District of New York, saying that BitMEX willfully failed to establish, implement, and maintain an adequate anti-money laundering program.
"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 (AML), as required by federal law," Damian Williams, U.S. Attorney for the Southern District of New York, said in the statement.
BitMEX has faced serious legal problems in the U.S. since at least 2022.
In late 2022, prosecutors asked a court to sentence Greg Dwyer, the company's former head of business development, to 12 months of probation for violating the U.S. Bank Secrecy Act. Earlier that year, Arthur Hayes, one BitMEX's founders, was sentenced to six months of home detention after previously pleading guilty to also violating the Bank Secrecy Act.
"BitMEX opened itself up as a vehicle for large-scale money laundering and sanctions evasion schemes, posing a serious threat to the integrity of the financial system," Williams said in Wednesday's statement. "Today’s guilty plea indicates again the need for cryptocurrency companies to comply with U.S. law if they take advantage of the U.S. market."
Founded in 2014, BitMEX "long serviced and solicited business from U.S. traders and also operated through U.S. offices, was required to register with the Commodity Futures Trading Commission and to establish and maintain an adequate AML program," the statement said.
BitMEX pled guilty to one count "of violating the Bank Secrecy Act, which carries a maximum sentence of five years in prison and a fine."
In a statement published several hours after pleading guilty, BitMEX said:
The company went on to say, "This charge has no impact on our business operations.""The BSA charge is old news – this is the same charge brought in 2020 against our founders relating to BitMEX’s operations up to September 2020. Our founders accepted this and were sentenced back in 2022. BitMEX has long since fully remediated its operations, and there is nothing new in this charge.
"We have accepted the BSA charge, will seek an expedited sentencing hearing, and argue that no further fine should be imposed, given the substantial amounts already paid by our founders under the BSA charges brought against them, and under our no admission/no denial settlements with the CFTC and FinCEN in 2021. "
BitMEX wasn't the first or the largest exchange to be punished for failing to comply with U.S. regulations. Changpeng Zhao, the former head of Binance, the world's largest cryptocurrency exchange, recently reported to a low-security California facility to begin a four-month federal prison term. Zhao pled guilty in late 2023 to failing to implement appropriate anti-money laundering protocols at Binance.
Update, July 11 (13:20 UTC): Added statement from BitMEX.
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