The U.S. Department of Justice (DOJ) has confirmed that BitMEX, a crypto derivatives platform, has pleaded guilty to violating the Bank Secrecy Act (BSA). This comes nearly four years after legal disputes began.
In response to the U.S. Department of Justice’s decision to file a charge of Bank Secrecy Act (BSA) violation against HDR Global Trading Limited (HDR), the entity owning and operating BitMEX, we would like to share the following statement.
The BSA charge is old news – this is… pic.twitter.com/xvnGvfPvOA
— BitMEX (@BitMEX) July 10, 2024
The court revealed that the Seychelles-based crypto exchange deliberately ignored Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations from September 2015 to September 2020.
Over these five years, BitMEX allowed customers to sign up and trade crypto without providing personal information or identification. The exchange even promoted itself as a place where users could trade without verifying their real names, the DOJ stated. Because of its lax AML/KYC standards, BitMEX became a popular hub for money laundering and sanctions evasion.
U.S. Attorney Damian Williams highlighted in a DOJ press release:
“As the founders admitted in federal court in 2022, BitMEX – a leading crypto derivatives platform from 2015 to 2020 – operated in the U.S. without any anti-money laundering program as required by federal law.
As a result, BitMEX became a tool for large-scale money laundering and sanctions evasion, posing a significant threat to the financial system’s integrity. Today’s guilty plea serves as a wake-up call for other crypto companies to comply with U.S. laws if they wish to remain in this market.”
BitMEX has faced severe legal troubles in the U.S. for years. In early October 2020, the Commodity Futures Trading Commission (CFTC) charged BitMEX co-founder Arthur Hayes and three other executives with violating AML regulations and operating an unregistered derivatives exchange in the U.S. These individuals have since surrendered and left the company. In August 2021, BitMEX agreed to pay a $100 million fine.
A DOJ spokesperson declined to comment on why the charges against BitMEX as a company were brought four years after similar charges were made against its executives. BitMEX has yet to be sentenced, and the case is being overseen by Judge John G. Koeltl of the Southern District of New York (SDNY).
However, BitMEX is not the first exchange penalized for not complying with U.S. regulations. The heaviest penalty so far was imposed on Binance, the world’s largest crypto exchange, with a fine of $4.3 billion. Former CEO Changpeng Zhao is currently serving a four-month prison sentence.
Related news: Binance’s Founder Changpeng Zhao Begins Prison Sentence in California
