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Cryptocurrency exchange BitMEX has plead guilty to violating the Bank Secrecy Act (BSA), as announced by the U.S. Department of Justice (DOJ) on Wednesday.
The news follows Bitcoin (BTC) flash-crashing down to $8,900 on the exchange back in March.
Court documents reveal that from September 2015 to September 2020, the Seychelles-based platform intentionally failed to implement proper know-your-customer (KYC) and anti-money laundering (AML) protocols. This period ended when the Commodity Futures Trading Commission (CFTC) accused BitMEX of illegally offering crypto derivative trading to U.S. customers, while the DOJ charged four employees with BSA violations.
During this time, BitMEX allowed near-anonymous cryptocurrency trading without requiring identification or documentation from customers. The exchange marketed itself as a platform for retail trading without real-name verification. Prosecutors argue that these lax standards made BitMEX a hotspot for money laundering and sanctions evasion.
Illegal US operations
U.S. Attorney Damian Williams highlighted the perceived wrongdoings on BitMEX’s part in the announcement. He said:
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, as required by federal law.
As a result, 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. 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.
The charges against the exchange mirror those previously brought against its co-founders Arthur Hayes, Samuel Reed, and Benjamin Delo, as well as its first employee, Gregory Dwyer, all of whom have pleaded guilty.
Additionally, BitMEX admitted to lying to a foreign bank to open an account for a shell company, Shine Effort Inc. Limited, controlled by Delo but beneficially owned by BitMEX.
The case, overseen by U.S. District Judge John G. Koeltl in the Southern District of New York, has not yet reached the sentencing stage for BitMEX.
