tl;dr
BitMEX exchange has pleaded guilty to violating the United States Bank Secrecy Act, admitting to running the exchange without implementing Know-Your-Customer (KYC) checks, which are crucial for preventing money laundering and preserving the integrity of the financial system. The exchange's co-founde...
BitMEX exchange has pleaded guilty to violating the United States Bank Secrecy Act, admitting to running the exchange without implementing Know-Your-Customer (KYC) checks, which are crucial for preventing money laundering and preserving the integrity of the financial system. The exchange's co-founders, including Arthur Hayes, have already faced consequences for their involvement in these violations.
The U.S. authorities' actions in this case reflect a broader commitment to combating Anti-Money Laundering (AML) violations in the cryptocurrency industry, as seen in similar charges against Kucoin Exchange and Binance in recent years. These developments may lead to stricter regulatory measures for crypto exchanges.
The investigation into the flouting of US laws by BitMEX predates 2020. In the early phase of the investigation, the exchange’s co-founders were the center of attraction. Arthur Hayes, Samuel Reed, and Benjamin Delo admitted to running the exchange without demanding Know-Your-Customer (KYC) checks, which are included in Anti-money Laundering (AML) procedures to safeguard users from exploitation and ensure the integrity of the U.S. financial system and national security.
While the co-founders have already paid their price for their role in the exchange’s violations, the exchange is also expected to pay some price as would be decided by U.S. District Judge John G. Koeltl.
Generally, the consistency of the U.S. authorities on the BitMEX case reflects the commitment of the government towards ensuring citizens’ safety. In Q1 2024, the United States Department of Justice (DoJ) charged Kucoin Exchange and two of its co-founders Chun Gan and Ke Tang for flouting multiple laws to grow their trading platform into one of the biggest in the crypto industry. At the time, Damian accused all those involved of conspiring to operate an unlicensed money-transmitting business and violating the Bank Secrecy Act. More recently, Paxful co-founder Artur Schaback pleaded guilty to conspiracy and failing to maintain the platform’s AML program. The number of these AML violation cases may force the authorities to adopt stricter measures against crypto exchanges.