Arthur Hayes and Benjamin Delo, BitMEX crypto derivatives exchange founders, have pleaded guilty to charges of violating the Bank Secrecy Act.
According to the US Department of Justice, the two founders willfully failed to establish, implement, and maintain anti-money laundering (AML) programs at BitMEX.
Under the terms of their respective plea agreements, Delo and Hays have each agreed to pay a $10 million fine “representing pecuniary gain derived from the offense.”
U.S. Attorney Damian Williams issued the following statement on the announcement:
“As cryptocurrencies and technologies designed to facilitate their trade proliferate, companies engaged in the virtual currency economy have become critical gatekeepers in efforts to ensure that U.S. markets are fair, efficient, and secure. The opportunities and advantages of operating in the United States are legion, but they carry with them the obligation for those businesses to do their part to help in driving out crime and corruption. 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.”
The Department of Justice said that Hayes and Delo, along with indicted co-defendant Sam Reed, operated BitMEX from September 2015 up to and including September 2020.
The government stated that as a result of its willful failure to implement AML and KYC programs, BitMEX was in effect a money-laundering platform.
Justice cited the example when in May 2018 Hayes was notified of allegations that BitMEX was being used to launder the proceeds of a cryptocurrency hack. The company and their founders failed to file a suspicious activity report thereafter nor did they implement an AML or KYC program in response.
Additionally, BitMEX was said to be a vehicle for sanctions violations.
The duo has pleaded guilty to one count each of violating the Bank Secrecy Act, which carries a maximum penalty of 5 years in prison. Any sentencing of the defendant will be determined by the judge.
BitMEX as a platform remains active and under new leadership which has instituted AML/KYC rules.
