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Crypto exchange platform BitMEX accused of avoiding US AML regulations; setting up offshore operations, and allowing US customers to transact
One of the three co-founders of BitMEX, Samuel Reed, has finally pleaded guilty in Federal court. Reed joined the other co-founders of trading and exchange platforms, Arthur Hayer and Benjamin Delo. They already pleaded guilty for the same reason of violating the US Bank Secrecy Act.
According to the US Department of Justice, the third founder of cryptocurrency exchange and trading derivative platform BitMEX pleaded guilty in front of the Federal Court on Wednesday for violating United States Anti Money Laundering rules.
United States District Court in the Southern District of New York is where the hearing of the BitMEX AML violations is going on, where Reed pled guilty. In his statement, he agreed that he was included in violation of Bank Secrecy Act which they did by willfully failing to establish, maintain and implement an anti-money laundering program at the platform of BitMEX.
As per the plea agreement, Reed has to pay a fine of $10 million, and the charge also contains a maximum of five years in prison, as told by the Department of Justice. However, the sentence for Reed is yet to decide which federal judge will do.
US Attorney Damian Williams stated that the guilty plea of Samuel Reed reflects that the office, indicating the department of justice, will not permit crypto exchanges to operate as parallel financial systems that allow illicit and illegal processes enabling criminal actors without checking on them with no detection. He further said that the office would investigate more vigorously and proceed against the operators of such crypto exchanges who violate US federal laws deliberately.
In 2020, the Department of Justice and Commodity Futures Trading Commission, both regulatory agencies, charged the trading platform BitMEX and its founders. As the investigation went on and the case took its pace, both regulatory agencies that are CFTC and Financial Crimes Enforcement Network, settled and charged BitMEX to pay a penalty of $100 million.
The Department of Justice put allegations in October 2020 on Arthur Hayes, Benjamin Delo, and Samuel Reed for attempting to evade US AML regulations. They set up an offshore shop that allowed US Customers to transact on the platform.
Other than the DOJ, CFTC charged claiming that BitMEX allowed customers who are US residents to trade crypto derivatives even when BitMEX had not registered as a derivative platform with the federal regulator.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
