Crypto exchange and derivative trading platform BitMEX pled guilty on Wednesday, July 10, 2024, to breaching the Bank Secrecy Act, as per the U.S. Attorney for the Southern District of New York. BitMEX acknowledged that it intentionally failed to establish, implement, and maintain an effective anti-money laundering (AML) program. The U.S. Attorney for the Southern District of New York, Damian Williams, stated that BitMEX, a leading cryptocurrency derivatives platform from 2015 to 2020, operated in the United States without a substantial anti-money laundering program, as mandated by federal law.
BitMEX has been embroiled in legal issues in the U.S. since at least 2022. In late 2022, prosecutors sought a 12-month probation sentence for Greg Dwyer, BitMEX’s former head of business development, for violating the U.S. Bank Secrecy Act. Earlier in the same year, Arthur Hayes, one of BitMEX’s founders, was sentenced to six months of home detention after pleading guilty to violating the Bank Secrecy Act.
Williams stated that BitMEX served as a conduit for large-scale money laundering and sanctions evasion, posing a significant threat to the financial system. The guilty plea highlights the necessity for cryptocurrency firms to adhere to U.S. laws when operating in the U.S. market.
BitMEX, established in 2014, extensively catered to and solicited business from U.S. traders, and maintained offices in the U.S., thereby necessitating registration with the Commodity Futures Trading Commission and the establishment of a compliant AML program.
BitMEX admitted guilt to breaching the Bank Secrecy Act, carrying a maximum sentence of five years in prison and a fine.
BitMEX is not the first or the largest exchange to face repercussions for non-compliance with U.S. regulations. Changpeng Zhao, former head of Binance, the world’s largest cryptocurrency exchange, recently commenced a four-month federal prison term in a low-security California facility. Zhao pleaded guilty in late 2023 to the failure to implement appropriate anti-money laundering protocols at Binance.
