ON THURSDAY, the US Attorney’s Office in Manhattan announced that the founders of cryptocurrency exchange BitMEX, Arthur Hayes and Benjamin Delo, pled guilty to violating the bank secrecy act by failing to develop an anti-money laundering program.
According to the US Attorney’s office, Hayes and Delo, who launched BitMEX in 2014, each agreed to pay a $10 million fine as part of their plea deal.
“They permitted BitMEX to operate as a platform in the shadows of the financial markets,” said Damian Williams, the US Attorney for the Southern District of New York, in a statement, adding that his office will continue to investigate and prosecute money laundering in the cryptocurrency industry.
According to a spokeswoman, Delo’s absence of a proper client identification scheme is regrettable.
This effectively puts an end to the situation. Hayes is excited to devote more time and effort to his charities. He accepts responsibility for his conduct and looks forward to the day when he can put this matter behind him.
Hayes and Delo also corresponded with individuals in Iran, an OFAC-sanctioned country, and enabled them to utilize the site even after doing so, according to the United States Department of Justice (DOJ).
The authorities also disproved the two executives’ assertions that no Americans were using the site, claiming that Delo falsified internal monitoring data to show that a customer’s place of residency was not the United States.
The Accusations
In October 2020, they were accused of failing to execute a know your customer requirement mandated by federal law, along with co-founder Samuel Reed and employee Gregory Dwyer. At the time, prosecutors said BitMEX had become a “vehicle” for money laundering and sanctions breaches.
The Commodity Futures Trading Commission (CFTC) slammed BitMEX and its creators with federal charges. After a ten-month legal struggle, BitMEX decided to settle and pay the CFTC a $100 million fine.
Following the court filings, Hayes resigned as CEO of BitMEX, and Alexander Höptner was appointed in his place.
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