BitMEX founders pay $20 million in fines after pleading guilty to violating Bank Secrecy Act.

The U.S. Attorney’s Office for the Southern District of New York announced that Arthur Hayes and Benjamin Delo, co-founders of the BitMEX cryptocurrency exchange, pled guilty to violating the Bank Secrecy Act (BSA) by “willfully failing to establish, implement, and maintain an anti-money laundering (AML) program at BitMEX.” The co-founders of the exchange admitted to using their platform as a means of dodging U.S. money-laundering rules.

 

Hayes and Delo could face prison time.

While Hayes and Delo could face the possibility of a five-year sentence in prison, the Wall Street Journal reported that the deals the pair reached argue for sentences of six-to-12 months. The former CEO and the former CFO of BitMEX will also have the opportunity to seek a lesser sentence when they appear before U.S. District Judge John G. Koeltl at their sentencing hearing (date unspecified). In the meantime, each man has agreed to pay a $10 million penalty representing their “pecuniary gain derived from the offense.”

 

Other co-founders of BitMEX are yet to resolve their charges. 

Other indicted co-founder of BitMEX and ex-CTO Sam Reed, along with its former head of operations Greg Dwyer, have yet to resolve their own charges. If they fail to reach a plea agreement, the pair are scheduled to go to trial later this year. All four accused additionally faced charges of conspiring to violate the Bank Secrecy Act, which also carries a potential maximum five-year prison sentence. As reported earlier, the crypto exchange previously reached a $100 million settlement with the U.S. CFTC and the Financial Crimes Enforcement Network FinCEN. The site also faces a number of civil suits by aggrieved customers who accuse BitMEX of market manipulation against their own customers.

A spokesperson for Ben Delo said: “Ben Delo has resolved Bank Secrecy Act allegations with the US Department of Justice through a negotiated settlement. He regrets that BitMEX, the cryptocurrency derivatives platform he co-founded, lacked an adequate customer identification programme. Ben voluntarily appeared in the US to address these charges. Together with BitMEX’s agreement with the CFTC and FinCEN last year, all financial benefits from activity in the US have been paid to US authorities. This firmly draws a line under the matter. Ben looks forward to focusing his time and energy on his philanthropy – which this agreement allows him to do – and is grateful to his friends and family for their continued support.”