BitMEX Pleads Guilty to Bank Secrecy Act Violation, Faces Potential 5-Year Sentence

BySamson Ononeme

Jul 10, 2024 ,
BitMEX faces potential five-year prison sentence after pleading guilty to Bank Secrecy Act violation.

Key Insights

  • BitMEX pleads guilty to violating the Bank Secrecy Act by failing to maintain an adequate anti-money laundering program.
  • The crypto exchange faces a maximum sentence of five years in prison and a fine.

NEW YORK (MarketsXplora) – Cryptocurrency exchange and derivatives trading platform BitMEX has pleaded guilty to violating the Bank Secrecy Act, the U.S. Attorney for the Southern District of New York announced on Wednesday.

The company admitted to willfully failing to establish, implement, and maintain an adequate anti-money laundering (AML) program as required by federal law. BitMEX, which operated as one of the world’s leading cryptocurrency derivatives platforms from 2015 to 2020, conducted business in the United States without a meaningful AML program in place.

U.S. Attorney Damian Williams stated,

“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.”

This guilty plea is the latest development in a series of legal troubles for BitMEX. In late 2022, prosecutors sought a 12-month probation sentence for Greg Dwyer, the company’s former head of business development, for violating the Bank Secrecy Act. Earlier that year, BitMEX co-founder Arthur Hayes received a six-month home detention sentence after pleading guilty to similar charges.

Founded in 2014, BitMEX serviced and solicited business from U.S. traders and operated through U.S. offices. As such, it was required to register with the Commodity Futures Trading Commission and establish an adequate AML program.

The company now faces a maximum sentence of five years in prison and a fine for the single count of violating the Bank Secrecy Act.

This case follows a broader trend of cryptocurrency exchanges facing legal consequences for regulatory non-compliance. Recently, Changpeng Zhao, former head of Binance, the world’s largest cryptocurrency exchange, began serving a four-month federal prison term for failing to implement proper anti-money laundering protocols.

Williams emphasized, “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.”

Samson Ononeme

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