BitMEX fined $100 million for violating bank secrecy law

On January 15, the United States Department of Justice (DOJ) announced that BitMEX and its parent company, HDR Global Trading Limited, were fined $100 million for violations of the Bank Secrecy Act (BSA). .

The court found that the crypto exchange deliberately failed to establish adequate anti-money laundering (AML) and know-your-customer (KYC) protocols.

Response from BitMEX

In addition to the fine, the company was sentenced to two years of probation. U.S. Attorney Matthew Podolsky highlighted the importance of the ruling, saying it sends a strong message to businesses that failure to comply with AML and KYC requirements will result in serious consequences.

This development follows the company’s guilty plea in July 2024 to BSA violations after a lengthy legal battle. The company initially agreed to pay $110 million in penalties, but faced additional financial penalties imposed by the court.

BitMEX responded to the ruling in a statement, expressing disappointment at the additional penalty but emphasizing that the amount was significantly lower than the $420 million requested by the DOJ over the past three years.

The company called the accusations “old news” and expressed relief at having resolved the issue, revealing its commitment to moving forward with a focus on innovation and quality of services. He also noted efforts to strengthen regulatory compliance, including the implementation of advanced user verification systems and comprehensive AML and KYC frameworks.

Legal fallout

Court documents revealed that BitMEX, founded in 2014 by Arthur Hayes, Benjamin Delo and Samuel Reed, joined by Gregory Dwyer in 2015, knowingly operated in the United States without proper registration or a sufficient AML program.

Despite being fully aware of the legal requirements, company executives bypassed KYC protocols, allowing US traders to access the platform with minimal verification.

The investigation further revealed that the exchange deliberately took steps to evade U.S. laws and misled a bank about a subsidiary’s operations to funnel millions of dollars through the financial system, prioritizing profits instead as compliance with regulatory obligations.

This latest judgment is part of a criminal case following separate settlements. Hayes, Delo, Reed and Dwyer had all previously pleaded guilty to violating the Bank Secrecy Act and were sentenced in 2022. Earlier that year, the executives were also fined a total of $30 million in a civil case brought by the Commodity Futures Trading Commission (CFTC).

At the time, BitMEX agreed to pay $100 million to settle with the CFTC and the Financial Crimes Enforcement Network (FinCEN). Hayes also resigned as CEO in 2020 and later turned himself in to U.S. authorities in connection with the criminal charges.