Crypto Exchange BitMEX Founders Plead Guilty After Failing to Establish AML Rules

Founders of cryptocurrency exchange BitMEX have pleaded guilty to violating bank secrecy regulations by failing to establish an anti-money laundering (AML) program, the U.S. Attorney’s Office in Manhattan announced Thursday (Feb 24).

Arthur Hayes, 36, of Miami, Florida, and Benjamin Delo, 38, of the United Kingdom and Hong Kong, who launched the East Africa-based crypto exchange and derivative trading platform in 2014, each agreed to pay a $10 million, the U.S. Attorney’s office said. The men pleaded guilty to one count each of violating the Bank Secrecy Act. The violation carries a maximum penalty of five years in prison.

“They allowed BitMEX to operate as a platform in the shadows of the financial markets,” said Damian Williams, the U.S. Attorney for the Southern District of New York, in a statement.

A spokesperson for Delo said he regrets the platform didn’t have an satisfactory customer identification program while a Hayes spokesperson said he “accepts responsibility for his actions and looks forward to the time when he can put this matter behind him,” Reuters reported.

Last month, a report revealed the U.S. Securities and Exchange Commission (SEC) brought 20 lawsuits and administrative proceedings for cryptocurrency-related violations since President Joe Biden’s team was hired at the agency a year ago.

Read more: SEC Stays Focused on Cryptocurrency Enforcement, Imposes $2B in Fines in 2021

In the 38-page report, researchers said at the close of 2021, the SEC had imposed $2.35 billion in fines against digital asset service companies. Of the 20 crypto enforcement actions, 14 were litigated in federal courts and six were resolved within the SEC. About half of the litigations took place in New York.