BitMEX Guilty of 5-Year Bank Secrecy Violations

Sahana Kiran
Source – Block

Amidst the ongoing volatility in the cryptocurrency market, the industry was hit with yet another news. Prominent cryptocurrency exchange, BitMEX entered a guilty plea for breaking the Bank Secrecy Act [BSA]. This was made public by the U.S. Department of Justice [DOJ] in a recent release. According to a statement from the Southern District of New York U.S. Attorney, BitMEX deliberately neglected to create, carry out, and uphold a sufficient anti-money laundering policy.

The cryptocurrency exchange did not set up a stringent know-your-customer [KYC] program either. BitMEX failed to do so between September 2015 and September 2020. Right around this time, four exchange workers were accused of breaking the BSA by the DOJ. The DOJ is not the only one after BitMEX. The Commodities Futures Trading Commission [CFTC] previously accused the exchange of providing illegal cryptocurrency derivative trading services to U.S. consumers.

Damian Williams, the US Attorney for the Southern District of New York 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 (AML), as required by federal law.”

Also Read: BitMEX CEO Arthur Hayes Blasts Cardano on X, Prompting Hoskinson to React

BitMEX A Destination for Money Laundering?

The DOJ said that BitMEX promoted itself as a platform where retail consumers could trade without real-name verification. This was the case up until September 2020, it permitted users to register and transact in cryptocurrencies essentially anonymously without requiring any identifying information or supporting paperwork. Prosecutors claim that BitMEX became a hub for money laundering. They also noted how sanctions were being evaded because of the system in place. The statement read,

“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.”

Also Read: Here’s why Former Bitmex CEO is suing the Exchange for $3.4M