BitMEX Admits to Serving US Customers Illegally, DOJ Charges
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BitMEX has admitted to violating the Bank Secrecy Act (BSA), as announced by the U.S. Department of Justice (DOJ) on Wednesday.
Newly released court documents reveal that the cryptocurrency exchange failed to implement proper know-your-customer (KYC) and anti-money laundering (AML) protocols from September 2015 to September 2020.
During this period, the Commodity Futures Trading Commission (CFTC) accused BitMEX of providing illicit crypto derivative trading services to U.S. customers.
Additionally, the DOJ charged four BitMEX employees with BSA violations. Founded in 2014 by Arthur Hayes, Benjamin Delo, and Samuel Reed, BitMEX brought on Gregory Dwyer as its first employee and later Head of Business Development in 2015.
Legal Consequences and Sentencing
The charges against the co-founders and Dwyer in 2020, which they had previously pleaded guilty to, are nearly identical to the charge BitMEX now faces, relating to the same timeframe. 
The prosecution is being handled by the U.S. Attorney’s Office’s Illicit Finance and Money Laundering Unit, with potential five-year prison sentences looming for the co-founders.
Court documents and statements indicate that BitMEX, which operated with U.S. offices and solicited business from U.S. traders, was obligated to register with the CFTC and implement an effective AML program. These programs are crucial for preventing the illegal exploitation of financial institutions.
However, BitMEX executives took deliberate steps to avoid adhering to U.S. laws, such as AML and KYC requirements, even though they were aware of their necessity. The platform required only an email address for customer access.
Executive Actions and Misleading Practices
Senior executives knew that U.S. residents continued to use BitMEX’s services until at least 2018 and that the measures in place to prevent such trading were inadequate and easily circumvented.
Furthermore, BitMEX misled a bank regarding the purpose of a subsidiary, facilitating the transfer of millions of dollars through the U.S. financial system.
This deception not only allowed the company to operate under the radar but also compromised the integrity of financial regulations. The executives’ actions demonstrated a willful disregard for compliance, prioritizing growth and profit over legal obligations.
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