BitMEX, poised to be one of the most advanced Crypto Trading platforms for Bitcoin and among the top leading cryptocurrency exchanges in the world has pleaded guilty to violating the Bank Secrecy Act from 2015 to 2020.
We will look more closely at the details regarding the news in the sections below.
What were the accusations against BitMEX and its cofounders?
The BitMex group was accused of violating the Bank Secrecy Act (BSA) between years 2015 and 2020.
The accusations specifically accused the exchange of failing to conduct adequate steps to ensure know-your-customer (KYC) fulfillment and not setting up an adequate anti-money laundering (AML) program.
The exchange was charged with the allegations by the Commodity Futures Trading Commission (CFTC) following their suspicion against the exchange of having offered derivative trading services that were illegal by law. These services were offered to a lot of its customers who were based in the U.S.
Four of the members of the exchange including its three co-founders Samuel Reed, Arthur Hayes, Benjamin Delo, and their first employee Gregory Dwyer were the ones to be charged with the allegations
Let us now look at how the accusations turned out for these members and BitMEX in the section below.
What happened after the accusations?
After the accusations were made against the group the four-member group pleaded guilty to the charges and accepted the verdict given by the Department of Justice.
The present charges against BitMEX were similar to the previous accusations against the four individuals heading BitMEX in 2022.
The accusations against the group were that they worked as an accessory to money laundering and sanction violations throughout the years between September 2015 to September 2020.
This was seen as a direct result of their relaxed KYC standards and lack of preventive measures taken on their part.
The case against BitMEX also gained a bit of traction because they were not registered in the U.S. despite having a long list of U.S.-based clients.
Now, let us look at the details regarding the current case against BitMEX
What are the details regarding the current guilty plea by BitMEX?
Coming to the current details of the case BitMEX has accepted the charges and put itself up to the mercy of the DOJ.
It was in a notice published on July 10 that we came to know about the comment that US Attorney Damian William had made about BitMEX.
According to the notice, it was alleged that BitMEX had willingly failed to establish and implement an adequate program against money laundering from the years 2015 – 2020.
The current charges were seen as a result of the earlier 2022 criminal proceedings that were made against the four members running the company.
The charges that were levied against the company today were also for the same money laundering and sanction evasion schemes.
It was argued that these acts posed a serious threat to the integrity of the financial system.
One thing that the attorney had used as an argument against BitMEX was that it had “flaunted” the fulfillment of the AML requirements despite not having actually done so.
The BitMEX exchange had apparently been asking its users for their email addresses to verify their identity more than any other acceptable KYC standard documents.
The BitMEX group responded by accepting the charges and pleading guilty to all of them.
After looking at the guilty plea of BitMEX we can also find that the exchange in addition to admitting to the charges that were put on it by the DOJ has also pleaded guilty to an additional offense of having lied to a bunch of foreign banks as part of its violations.
However, this does raise the question of why the DOJ put so much delay in between the accusations against their co-founders in 2020 and then now against the company just recently.
This question remains unanswered and the case verdict remains pending even after the acceptance of the charges.
The Bottom Line
The Case against BitMEX and its recent developments stand to show us the importance of taking precautionary measures when dealing with exchanges that seem fishy in their working.
A proper check on their registration, working state, and their previous running history could be all it takes to avoid such hassles.
