- Bitmex has admitted to violating the Bank Secrecy Act between 2015 and 2020
- US Attorney Damian Williams noted that Bitmex operated without a substantial AML program
- Williams indicated that Bitmex’s non-compliance has made it vulnerable to money laundering and sanctions evasion schemes
HDR Global Trading Limited, known more popularly as Bitmex, has admitted to violating the Bank Secrecy Act between 2015 and 2020. US Attorney Damian Williams noted in an announcement yesterday that Bitmex, once one of the leading cryptocurrency derivatives platforms, operated in the United States without a substantial anti-money laundering (AML) program, as mandated by federal law. Williams noted that this lack of compliance made Bitmex vulnerable to large-scale money laundering and sanctions evasion schemes, significantly threatening the financial system’s integrity.
Bitmex Bypassed AML/KYC
Bitmex was founded in 2014 by Arthur Hayes, Benjamin Delo, and Samuel Reed and quickly grew to become the world’s most popular Bitcoin leverage trading site. Despite its significant operations and customer base in the US, Bitmex failed to register with the Commodity Futures Trading Commission (CFTC) and did not establish an adequate AML program, including a “know your customer” (KYC) component. Instead, the company required only an email address for access to its services.
A CFTC investigation in 2019 ended with a plethora of charges filed against it and its leading executive the following year, marking the end of Bitmex’s dominance. The CFTC accused the three senior executives of being aware that US customers were using the platform deposit this lack of regulation, with the company even misleading a bank about the nature of a subsidiary in order to channel millions of dollars through the US financial system.
Founders Pleaded Guilty
Christie M. Curtis, Acting Assistant Director in Charge of the FBI’s New York Field Office, criticized Bitmex for its inadequate service access credentials, which circumvented essential AML procedures designed to shield US financial markets from illicit activities.
Hayes, Reed, Delo and the company’s first employee, Gregory Dwyer, have already pleaded guilty to violating the Bank Secrecy Act, but it remains to be seen who will be punished following the Bitmex guilty plea.
