The announcement closes a chapter that began in 2020, when the US authorities filed charges against the founders of BitMEX and the platform for operating without proper federal registration.
The co-founders of the cryptocurrency derivatives exchange, BitMEXArthur Hayes and Benjamin Delo, pleaded guilty to violating the United States Bank Secrecy Act.
After a long legal battle, the US Department of Justice (DOJ) ad that Hayes and Delo “did not knowingly establish, implement or maintain an anti-money laundering (AML) program” on its digital asset platform. Both pleaded guilty in federal court Thursday and they agreed to separately pay a $10 million criminal fine.
The co-founders could face a maximum of five years in prison, according to the DOJ, although their sentences have not yet been decided. For its part, it should be noted that the amount of the criminal fine represents the profit derived from the crime.
BitMEX founders close legal chapter
The news closes a chapter that began in 2020, when the Justice Department and the Commodity Futures Trading Commission (CFTC) filed federal charges against BitMEX and its founders. At that time, the Authorities alleged that Hayes, Delo and the company’s other owner, Samuel Reed, “they tried to evade” AML regulations of the US establishing operations abroad but allowing US customers to transact on the platform.
The CFTC charges were added, alleging that BitMEX allowed US customers to trade cryptocurrency derivatives without a federal license. The company settled these charges last year when it paid a $100 million fine to regulatory agencies.
BitMEX is a cryptocurrency trading platform based in Seychelles (East Africa) that offers cryptocurrency futures, derivatives and margin trading up to 100x. The exchange once offered its services without any know-your-customer (KYC) verification or AML procedures in the US.
In its February 24 statement, the DOJ said such lack of regulatory compliance essentially caused BitMEX became a “money laundering platform“. He added that the company offered services to clients from Iran, a sanctioned jurisdiction.
As a result of its deliberate failure to implement AML and KYC programs, BitMEX was in effect a money laundering platform. For example, in May 2018, Hayes was notified of allegations that BitMEX was being used to launder the proceeds of a cryptocurrency hack.
Two other executives remain in litigation
Hayes, who resigned as CEO of the company shortly after charges were filed against him, told news outlets that he accepted responsibility for his actions “and look forward to the time when I can put this matter behind me“.
For his part, a spokesman commented on behalf of Delo that the founder “has resolved Bank Secrecy Act allegations with the US Department of Justice through a negotiated settlement. He laments that BitMEX, the cryptocurrency derivatives platform he co-founded, lacked a proper client identification program.“.
“Ben voluntarily appeared in the US to address these charges. In conjunction with BitMEX’s settlement with the CFTC and FinCEN last year, all financial profits from US activity have been paid to authorities“, he added.
It was not immediately clear whether Reed and Gregory Dwyer, the CEO of BitMEX who was also indicted in 2020, also plan to plead guilty to the charges. In September of last year, Dwyer’s lawyers negotiated his extradition to the US to take on the litigation process in that country.
Article by Hannah Estefanía Pérez / DailyBitcoin
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