BitMEX, the cryptocurrency trading platform, has incurred a considerable $100 million penalty for contravening US anti-money laundering (AML) requirements.
This penalty arises from the corporate’s noncompliance with the US Bank Secrecy Act (BSA), which permitted illegal transactions on its platform for multiple years.
Noncompliance With KYC And AML Regulations
The violation stems from BitMEX’s lack of sufficient Know Your Customer (KYC) processes, that are mandatory for any platform operating within the US. The goal of those protocols is to forestall illegal financial activities like money laundering.
BitMEX’s inability to implement these rules permitted US users to avoid regulations and have interaction in illicit trading on the platform, leading to the infractions.
Cryptocurrency exchange BitMEX has been fined $100 million for violating the federal Bank Secrecy Act by failing to adequately police money laundering, the DOJ said https://t.co/9hUmB2w2TD pic.twitter.com/nwZpcLD9gD
— Reuters Legal (@ReutersLegal) January 15, 2025
Repercussions For BitMEX Founders
BitMEX as a complete isn’t the exclusive goal of the penalty. There are legal ramifications for the platform’s developers, who actively oversaw these breaches.
Their failure to make sure compliance has significantly increased the penalty. This case highlights the financial and private risks faced by CEOs of bitcoin exchanges that fail to establish regulatory frameworks.
Imposition Of A Two-Yr Probationary Period
The trading platform responded to Judge John Koeltl’s order by stating that the penalty is for an offense for which its founders received a nice in 2022. The exchange said in an announcement on Wednesday that the $100 million nice is lower than the $200 million that the Department of Justice (DoJ) had originally requested.
BTCUSD trading at $98,832 on the 24-hour chart: TradingView.com
Other than these penalties, BitMEX’s parent company has faced a two-year probation. Throughout this probation period, the exchange must develop its compliance practices and exhibit a commitment to adhering to the law.
This probation is meant to confirm that the corporate has learned its lesson and is actively taking measures to forestall any future violations.
Guilty Plea
BitMEX entered a guilty plea to a violation of the US Bank Secrecy Act in July 2024. The Southern District of Latest York U.S. Attorney’s Office declared that it had identified the conversation as a deliberate breach of existing statutes.
Benjamin Delo, Samuel Reed, and Arthur Hayes had acknowledged operating the exchange without requiring Know-Your-Customer (KYC) checks as early as 2020.
Penalties For The Crypto Industry
The penalty and probation might establish a precedent, resulting in more stringent regulations throughout the industry. This represents a pivotal moment within the overarching discourse over the longer term of cryptocurrency regulations.
Featured image from Telegrafi, chart from TradingView