Breaking: BitMEX Pleads Guilty To Bank Secrecy Act Offense

BitMEX exchange might soon be putting its long-drawn investigation behind it as it has pleaded guilty to violating the United States Bank Secrecy Act. The U.S. Attorney’s Office for the Southern District of New York made the announcement, flagging the exchange’s willful violation of extant laws.

BitMEX Case Eyeing Final Close

The investigation into the flouting of US laws by BitMEX predates 2020. In the early phase of the investigation, the exchange’s co-founder were the center of attraction. Arthur Hayes, Samuel Reed, and Benjamin Delo admitted to running the exchange without demanding Know-Your-Customer (KYC) checks.

Usually this checks which are included in Anti-money Laundering (AML) procedures are mandated to safeguard users from exoloutation. More so, they ensure that the integrity the U.S. financial system and national security are preserved. However, BitMEX intentionally failed to meet up with these standards.

According to the prosecutors, this permitted the exchange to operate as a gateway for illicit activities.

“..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,” said Damian Williams, US Attorney.

While the co-founders have already paid their price for their role in the exchange’s violations , the exchange is also expected to pay some price as would be decided by U.S. District Judge John G. Koeltl.

U.S. Authorities Fights AML Violations

Generally, the consistency of the U.S. authorities on the BitMEX case reflects the commitment of the government towards ensuring citizens’ safety. In Q1 2024, the United States Department of Justice (DoJ) charged Kucoin Exchange and two of its co-founders Chun Gan and Ke Tang for flouting multiple laws to grow their trading platform into one of the biggest in the crypto industry.

At the time, Damian accused all that were involved of conspiring to operate an unlicensed money-transmitting business. They also allegedly conspired to violate the Bank Secrecy Act. Noteworthy, this was after the DoJ requested $4.3 billion as Binance settlement in Q4 2023 for violation of AML rules.

More recently, Paxful co-founder Artur Schaback pleaded guilty to conspiracy and failing to maintain the platform’s AML program. The number of these AML violation cases may force the authorities to adopt stricter measures against crypto exchanges.