BitMEX, as well as its founders, were accused of deliberately violating the Bank Secrecy Act between 2015 and 2020 by not adopting AML and Know Your Customer (KYC) programmes. This led to the business essentially turning into a money laundering platform. Now, a US federal judge sentenced BitMEX after the company pleaded guilty in July 2024, with the ruling including two years of probation and a USD 100 million fine.
Additionally, according to court documentation, BitMEX and its founders, who entered into related guilty pleas in 2022 and were sentenced to probation, previously paid nearly USD 110 million in related criminal and civil cases. Back in 2021, two US regulators underlined that the company did not conduct proper screening of customers, as well as accepted their funds to trade cryptocurrencies without being registered.
As detailed in court papers, despite knowing that the company served US customers and was required to set up an AML programme that included a KYC component, BitMEX and its executives disregarded those obligations, requiring its users to only offer an email address to leverage its services. It is mentioned that executives knew that US customers continued to access the trading platform through at least 2018 and that its policies were nominally put in place to prevent such trading were ignored to serve BitMEX’s objective of securing revenue through the market without taking into consideration US criminal laws.
Furthermore, documentation underlines that executives from BitMEX took decisions to exempt the company from the application of US laws, including AML and KYC requirements, even though they were aware of the firm’s obligations to implement such programmes. Regulators found that, in a bid to evade US AML laws, the company was deceptive to a bank about the purpose and nature of a subsidiary to enable BitMEX to expand its revenue via the US financial system.
At the time of writing, BitMEX’s lawyers did not respond to a request for comment. Commenting on the ruling, an attorney for the US stated that AML and KYC rules safeguard US residents from fraud, combat money laundering, and prevent the financing of terrorist activity. Also, they highlight that BitMEX’s sentence provides a clear message that companies that wilfully violate these obligations and refuse to implement these programmes will face consequences that affect their operations.
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