BitMex Founders Plead Guilty for Violating US Law

BitMex is embroiled in another controversy, this for AML and KYC norms.

BitMex Founders Were Fined

On Thursday, the U.S. Department of Justice said in a press release that the founders of cryptocurrency exchange BitMex, Arthur Hayes and Benjamin Delo pleaded guilty to violating the U.S. Bank Secrecy Act (BSA).

They failed to “establish, implement and maintain an anti-money laundering program at BitMEX.”

Both will be paying a 10 million criminal fine that represents the gains derived from the offence.

“Arthur Hayes and Benjamin Delo built a company designed to flout those obligations; they willfully failed to implement and maintain even basic anti-money laundering policies. They allowed BitMEX to operate as a platform in the shadows of the financial markets. Today’s guilty pleas reflect this Office’s continued commitment to the investigation and prosecution of money laundering in the cryptocurrency sector,” said Damian Williams, the United States Attorney for the Southern District of New York.

It is alleged that Hayes, Delo and fellow owner Samuel Reed willfully failed to comply with the Anti-Money Laundering (“AML”) and Know Your Customer (KYC) provisions of the country.

“As a result of its willful 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.”

Bitcoins from 2016 Hack Recovered

Earlier this month on February 8, BitMex was in the news when law enforcement had arrested Heather Morgan and Ilya Lichtenstein for allegedly laundering 119,754 Bitcoins. The source of these coins is the infamous 2016 hack of Bitfinex.

Around 94,000 of those Bitcoins have been recovered. “The court-authorized search warrants of online accounts controlled by Lichtenstein and Morgan, special agents obtained access to files within an online account controlled by Lichtenstein.”

Crypto is still considered nascent. That’s why it faces technical difficulties every now and then. The technology is developing and is expected to become robust enough as the traditional banking system.

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