BitMEX pleaded guilty to violating the Bank Secrecy Act (BSA), the US Department of Justice (DOJ) announced on Wednesday. According to newly released court documents, the Seychelles-based crypto exchange deliberately failed to establish an adequate know-your-customer (KYC) and anti-money laundering (AML) program at the exchange between September 2015 and September 2020. The Futures Trading Commission (CFTC) accused the exchange of providing illegal cryptocurrency derivatives trading services to U.S. clients, and the DOJ charged four of the exchange’s employees with violating the BSA.
Lack of KYC and AML programs on cryptocurrency exchanges
According to a statement from the US Department of Justice (DOJ), Seychelles-based cryptocurrency exchange BitMEX pleaded guilty to violating the Banking Secrecy Act (BSA) and was found guilty. This is described as an important development in the Bitcoin and altcoin industry and brings with it concerns that similar sanctions may be applied to other exchanges.
Between 2015 and 2020, BitMEX failed to implement required “know your customer” (KYC) and “anti-money laundering” (AML) programs while providing illegal crypto derivatives trading services to U.S. customers, the DOJ alleges. This led to the exchange’s platform being used as a tool for money laundering and sanctions violations. BitMEX’s founders and long-term employees admitted in federal court in 2022 that the company operated in the United States without a meaningful AML program. These admissions paved the way for the DOJ to file a lawsuit against BitMEX.
What is expected as punishment?
By admitting to violating the BSA, BitMEX hopes to mitigate the penalty imposed on the company and the executives involved. It is not yet known how much the DOJ will fine BitMEX and whether it will impose additional sanctions on the company. This step by the DOJ also serves as a warning to other crypto exchanges operating in the USA. The DOJ requires such platforms to comply with AML and KYC requirements and take necessary steps to protect the integrity of the financial system.
BitMEX’s violation of the BSA dealt a major blow to the company’s reputation. It is a matter of curiosity what path the company will follow in the coming period and how this will affect the crypto market. This news is considered an important development in the cryptocurrency industry. It shows the US’s commitment to regulating the cryptocurrency market and preventing money laundering. Although this situation is a cause for concern for cryptocurrency investors, it is also possible that it will contribute to making the industry more transparent and secure in the long term.
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