BitMEX Co-founder and former CEO Arthur Hayes (Photo credit: Michael Nagle/Bloomberg)

BitMEX, a cryptocurrency derivatives exchange, has pleaded guilty to violating the United States Bank Secrecy Act (BSA) for failing to implement adequate anti-money laundering (AML) and know-your-customer (KYC) measures between 2015 and 2020.

The Seychelles-based exchange admitted to allowing customers to trade anonymously without proper identification, becoming a hub for illicit activities such as money laundering and sanctions violations, a July 10 statement from the Attorney for the Southern District of New York noted. This admission echoes the guilty pleas of BitMEX’s three co-founders and a long-time employee in 2022 for similar charges.

In addition to the AML violations, BitMEX also pleaded guilty to lying to a foreign bank to secure a bank account for a shell company.

Damian Williams, the US Attorney for the Southern District of New York, emphasized the need for crypto companies to comply with the country’s laws, stating, “BitMEX opened itself up as a vehicle for large-scale money laundering and sanctions evasion schemes, posing a serious threat to the integrity of the financial system.”

“[BitMEX’s] guilty plea indicates again the need for cryptocurrency companies to comply with US law if they take advantage of the US market.”

The exchange now faces a maximum sentence of five years in prison and a fine, with the final sentencing decision resting with US District Judge John G. Koeltl of the Southern District of New York.

BitMEX’s case is not an isolated incident. In a similar case, Changpeng Zhao, the former head of Binance, the world’s largest cryptocurrency exchange, recently began serving a four-month prison sentence in California for failing to implement adequate anti-money laundering measures at Binance.

Meanwhile, key figures of defunct exchange FTX face sentencing in US courts. Co-founder Gary Wang and former engineering director Nishad Singh await their fate, while former CEO Sam Bankman-Fried is already serving a 25-year sentence for his role in the company’s collapse.

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