BitMEX: Breaking the Law and Lessons for Crypto Exchanges in the American Market
Date: 2024-07-12 Author: Henry Casey Categories: BUSINESS
According to U.S. Attorney for the Southern District of New York Damian Williams, crypto exchanges that want to continue to take advantage of US market opportunities must strictly comply with US law.
Threats to the financial system from BitMEX's actions
Damian Williams noted that during its operation in the United States, BitMEX became a vehicle for large-scale money laundering and sanctions evasion schemes. This posed a serious threat to the integrity of the country's financial system.
Assistant Director of the Federal Security Service (FBI) Christy Curtis added that BitMEX management deliberately violated the law in an effort to increase the company's profits. Curtis highlighted that the exchange was required to implement and operate an anti-money laundering (AML) program that included Know Your Customer (KYC) procedures, but instead only required clients to provide an email address to operate.
BitMEX Legal Issues in 2022
BitMEX's legal troubles began in 2022 when prosecutors sought to sentence former development executive Greg Dwyer to a year in prison for violating the US Bank Secrecy Act. BitMEX co-founder Arthur Hayes received six months of house arrest after pleading guilty.
Earlier, the New York District Court ruled that the managers of the BitMEX crypto exchange artificially liquidated user positions, which became another serious legal problem for the company.
These developments highlight the importance for crypto exchanges to strictly adhere to the law and implement necessary anti-money laundering and customer safety measures if they want to successfully operate in the US market.
