Crypto exchange Bitmex has pleaded guilty to violating the Bank Secrecy Act (BSA) by failing to maintain an adequate anti-money laundering (AML) program, resulting in the company being a vehicle for large-scale money laundering. The DOJ announced this plea following previous legal actions and settlements. Bitmex says: “We have accepted the BSA charge, will seek an expedited sentencing hearing.”
Crypto Exchange Bitmex Pleads Guilty to Violating Bank Secrecy Act, AML Failures
This article was published more than a year ago. Some information may no longer be current.
WRITTEN BY
SHARE
Bitmex Pleads Guilty to Violating Bank Secrecy Act
The U.S. Department of Justice (DOJ) announced on Wednesday that HDR Global Trading Ltd., also known as Bitcoin Mercantile Exchange or Bitmex, has pled guilty to “violating the Bank Secrecy Act by willfully failing to establish, implement, and maintain an adequate anti-money laundering (AML) program.”
U.S. Attorney Damian Williams explained that Bitmex’s founders admitted in federal court that the company operated without a meaningful AML program, emphasizing that it allowed the crypto platform to become “a vehicle for large-scale money laundering and sanctions evasion schemes, posing a serious threat to the integrity of the financial system.”
Founded in 2014 by Arthur Hayes, Benjamin Delo, and Samuel Reed, crypto exchange and derivatives trading platform Bitmex had a significant U.S. presence and was required to register with the Commodity Futures Trading Commission (CFTC) and maintain an AML program. However, it only required an email address for access, neglecting essential “know your customer” (KYC) protocols, the Justice Department stressed. The DOJ clarified:
HDR Global Trading Limited, an entity incorporated in the Republic of Seychelles, pled guilty to one count of violating the Bank Secrecy Act, which carries a maximum sentence of five years in prison and a fine.
This plea follows previous legal action in 2021 targeting the exchange over related conduct. Bitmex entered into settlements with U.S. regulators that year, agreeing to pay $100 million. In 2022, three founders pleaded guilty to U.S. charges and each agreed to a $10 million fine.
In response to the DOJ’s decision to charge HDR Global Trading Ltd. with a Bank Secrecy Act violation as announced on Wednesday, Bitmex issued a statement noting that this charge does not impact its operations, emphasizing:
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. We have accepted the BSA charge, will seek an expedited sentencing hearing.
Moreover, the company added 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 [Financial Crimes Enforcement Network] in 2021.”
What are your thoughts on Bitmex’s guilty plea and the implications for the crypto industry? Let us know in the comments section below.
