BitMEX, a popular cryptocurrency exchange platform, has admitted to violating the Bank Secrecy Act, as stated by the Department of Justice (DOJ). In a recent press release, the DOJ announced that BitMEX, which was founded by crypto entrepreneur Arthur Hayes in 2014, failed to establish and maintain an adequate anti-money laundering (AML) protocol, thus breaking the law.

BitMEX and its executives were accused of knowingly not registering with the Commodity Futures Trading Commission (CFTC), neglecting to implement an AML program, and bypassing mandatory know your customer (KYC) laws. The company and its executives were aware that operating in the United States required an AML program that included KYC measures, but they chose to disregard these requirements. They only required customers to provide an email address to use BitMEX’s services.

Furthermore, senior executives were aware that customers from the United States continued to access BitMEX’s trading platform, even until 2018, and the existing policies to prevent such trading were ineffective and easily manipulated to prioritize BitMEX’s financial interests.

U.S. Attorney Damien Williams emphasized that BitMEX’s disregard for the law posed a significant threat to the integrity of the U.S. financial system. By enabling money laundering and sanctions evasion schemes, BitMEX jeopardized the financial system’s integrity. This guilty plea reinforces the importance of cryptocurrency companies complying with U.S. law if they want to operate in the U.S. market.

According to the press release, violating the Bank Secrecy Act could result in a maximum penalty of five years in prison and a fine. In August 2022, BitMEX executive Gregory Dwyer also pleaded guilty to similar violations of the Bank Secrecy Act. Dwyer confessed to intentionally failing to establish, implement, and maintain an anti-money laundering program at BitMEX.

It is essential for investors to be cautious and conduct thorough research before engaging in high-risk investments in Bitcoin, cryptocurrency, or digital assets. Transfers and trades in these assets come with inherent risks, and any losses incurred are the responsibility of the investor. The Daily Hodl does not provide investment advice or act as an investment advisor, and it does not endorse the buying or selling of cryptocurrencies or digital assets.