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Breaking: BitMEX Pays $100M for Violating Anti-Money Laundering Laws

  • BitMEX has been ordered to pay a $100 million fine for violating the United States Bank Secrecy Act.
  • The penalty concludes a lengthy legal battle concerning inadequate anti-money laundering and know-your-customer measures at the exchange.
  • A federal judge in Manhattan finalized the fine following years of investigations into the company’s regulatory compliance.

BitMEX has been ordered to pay a $100 million fine for violating the United States Bank Secrecy Act. The penalty follows a lengthy legal battle involving accusations of inadequate anti-money laundering (AML) and know-your-customer (KYC) measures. The crypto exchange pleaded guilty to one count of violating the act, signaling the culmination of a multi-year investigation.

Court Orders BitMEX to Pay $100M

The $100 million fine against BitMEX was a major legal outcome for a federal judge in Manhattan who finalized the fine. The case follows years of investigations into the company’s operations and enforcement of U.S. regulatory standards. In a prior filing, BitMEX had argued that past penalties and settlements were sufficient, but the court rejected that.

According to the Department of Justice (DOJ), BitMEX ran its business with U.S. customers without ensuring an AML and KYC program. Prosecutors said the company’s negligence allowed transactions to occur with improper oversight. The court had ordered earlier settlements, but more financial penalties were necessary.

Despite being legally required, BitMEX operated without a meaningful AML or KYC program from 2015 to 2020. Regulators said the company made only minimal efforts to prevent U.S. users from using its platform. According to the FBI, BitMEX reportedly allowed new clients to place crypto trades with only an email address.

In 2021, the exchange said it would pay $100 million in fines to U.S. regulators for similar violations. The plea agreements also came in 2022, when the company’s founders pleaded guilty to related charges, underscoring lapses in compliance. The trouble with these punishments is that prosecutors said the company didn’t adequately fix its operational shortcomings.

DOJ Alleges BitMEX Misled U.S. Authorities

BitMEX expressed disappointment over the additional fine but emphasized the amount was lower than the initial demands. BitMEX had contested penalties sought by the DOJ of more than $200 million as excessive. The company said the reduction in the fine justified our position in challenging the DOJ’s claims.

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Despite ongoing scrutiny, BitMEX said it had received an independent audit of its compliance programs. The audit purportedly confirmed that the exchange’s enhanced AML and KYC rules are in line with regulation. The exchange assured its users that the ruling would not affect BitMEX’s business.

They allege that BitMEX deceived U.S. authorities and actively marketed its service in the United States. However, the exchange claims that it took measures to restrict U.S. users, and the exchange also allowed for transactions from users whose IP addresses are based in the United States. The platform was further undermined by compliance efforts when executives allegedly promoted the platform at U.S. events.

It also accused it of using a Hong Kong company to facilitate dollar transactions. Prosecutors said the company misled a Hong Kong bank about its activities to hide what it was really up to. According to this arrangement, it allowed U.S.–related transactions to continue unchecked until 2020.

Most recently, the judgment confirmed that the regulation of the cryptocurrency industry should not be overlooked, especially regarding robust compliance measures. However, BitMEX has upgraded its AML and KYC processes to avoid future violations. While still looking to maintain operations, the exchange is also focused on handling regulatory issues.

Disclaimer

The contents of this page are intended for general informational purposes and do not constitute financial, investment, or any other form of advice. Investing in or trading crypto assets carries the risk of financial loss. The forecasted data (also called “price prediction”) on this page are subject to change without notice and are not guaranteed to be accurate.

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Maxwell Mutuma
Maxwell Mutuma
Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. I write extensively on topics such as blockchain, cryptocurrency, tokens, and more for many publications. My goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.