BitMEX admits to not establishing anti-laundering rules per Bank Secrecy Act

• BitMEX entity HDR Global Trading Limited could face penalties for ignoring AML laws and compromising U.S. financial integrity from 2015-2020.
• Despite past settlements, BitMEX plead guilty to BSA violations, highlighting persistent AML compliance issues.

BitMEX has pled guilty to violating the Bank Secrecy Act (BSA) by failing to establish an adequate anti-money laundering (AML) program. This development is part of a case overseen by U.S. District Judge John G. Koeltl.

Federal prosecutors stated that BitMEX operated without a meaningful AML program from 2015 to 2020.

U.S. Attorney Damian Williams noted that BitMEX’s actions made it a vehicle for money laundering and sanctions evasion, which threatened the financial system’s integrity. 

Acting Assistant Director Christie M. Curtis emphasized that BitMEX knowingly disregarded AML procedures to increase revenue, thus failing to protect U.S. financial markets from illicit transactions.

The founders of BitMEX, Arthur Hayes, Benjamin Delo, Samuel Reed, and first employee Gregory Dwyer, were found to have knowingly ignored AML and Know Your Customer (KYC) requirements.

They required only an email address for service access and actively served U.S. customers despite regulatory obligations.

Prosecutors revealed that BitMEX executives took deliberate steps to circumvent U.S. laws.

They allowed U.S. traders on their platform and misled a bank about a subsidiary’s purpose to funnel millions through the U.S. financial system.

Previous legal actions and BitMEX’s response

The guilty plea followed previous legal action in 2021 targeting BitMEX over related conduct. That year, BitMEX entered into settlements with U.S. regulators, agreeing to pay $100 million.

In 2022, the three founders pleaded guilty to U.S. charges, each agreeing to a $10 million fine

BitMEX referred to the latest charge as “old news” on their social media platform X,

“This is the same charge brought in 2020 against our founders relating to BitMEX’s operations up to September 2020.”

The firm admitted that it has accepted the BSA charge.

Also, it will seek an expedited sentencing hearing and argue for no further fines, given the amounts already paid by its founders and in previous settlements.

The exchange emphasized that its compliance standards have improved since the period at issue.

Prosecutors noted that BitMEX, incorporated in the Seychelles, took on U.S. clients to boost revenue but did not obey U.S. laws designed to prevent misuse of the financial system.

Founded in 2014, BitMEX ostensibly withdrew from the U.S. in 2015 but implemented ineffective mechanisms to prevent U.S. residents from accessing the platform.

Executives continued to promote the exchange at conferences in the U.S.

Prosecutors added that a BitMEX founder acquired a Hong Kong-based business used to process U.S.-dollar transactions, misleading a Hong Kong-based bank about its true purpose.

This misconduct continued until 2020.

U.S. Attorney Damian Williams stated, 

“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.”