The U.S. District Attorney for the Southern District of New York recently announced the guilty plea of HDR Global Trading Limited, commonly known as “Bitcoin Mercantile Exchange” or “BitMEX.” The company pleaded guilty to violating the Bank Secrecy Act (“BSA”) by willfully failing to establish, implement, and maintain an adequate anti-money laundering (“AML”) program from 2015 to 2020. BitMEX, incorporated in the Republic of Seychelles, operates as an online global cryptocurrency exchange. The company is scheduled to be sentenced on October 7, 2024.
In 2021, five companies responsible for operating BitMEX reached a $100 million global settlement with the Financial Crimes Enforcement Network (“FinCEN”) and the Commodity Futures Trading Commission (“CFTC”) for willfully failing to implement an AML program in violation of the BSA and FinCEN and CFTC implementing regulations. According to FinCEN, this was its first enforcement action against a futures commission merchant (“FCM”).
In early 2022, BitMEX’s three founders – Benjamin Delo, Arthur Hayes, and Samuel Reed – pleaded guilty for their roles in BitMEX’s willful BSA violations and separately agreed to pay $10 million in criminal fines, representing the ill-gotten gains from their offenses. They were sentenced to 30 months’ probation, two-years’ probation, and 18 months’ probation, respectively. In August 2022, Gregory Dwyer, who served as BitMEX’s Head of Business Development, also pleaded guilty to one count of violating the BSA and aiding and abetting the same. Under his plea agreement, Dwyer received one year of probation and agreed to pay $150,000 in criminal fines.