The hits keep coming for the crypto derivatives exchange giant BitMEX. In addition to being indicted on criminal charges, founders Arthur Hayes, Ben Delo, and Samuel Reed are being sued in California for running a RICO (Racketeer Influenced and Corrupt Organizations Act) enterprise engaging in wire fraud, money laundering, interstate transportation of stolen property, digital asset market manipulation and racketeering. Other personnel associated with BitMEX and the alleged RICO scheme are also named as defendants in the lawsuit.
The lawsuit claims BitMEX refused to implement any KYC or AML checks.
The lawsuit is brought by Păun Gabriel-Razvan, a cryptocurrency trader and an owner of a crypto news aggregator. The allegations are scathing, calling Arthur Hayes, Delo, and Reed “notorious fraudsters, who have been criminally charged with felony money laundering related offenses by the U.S. Department of Justice and two of whom are currently fugitives from U.S. law enforcement.” The lawsuit claims that in launching BitMEX, the defendants intentionally sidestepped mandatory financial controls and refused to implement any KYC (Know Your Customer) or AML(Anti-Money Laundering) checks.
The crypto exchange is already under criminal investigation.
As reported earlier in October, BitMEX executives Arthur Hayes, Benjamin Delo, Samuel Reed, and Gregory Dwyer were charged with one count of violating the Bank Secrecy Act and one count of conspiracy, according to an indictment made public on October 2. BitMEX CEO Arthur Hayes is known for feuding with bitcoin skeptics such as economist Nouriel Roubini and urging traders to gamble on the most esoteric digital assets. The CFTC said BitMEX’s founders “failed to implement the most basic compliance procedures,” such as registering their activity with the CFTC. The crypto derivatives exchange received more than $11 billion in bitcoin deposits from accounts with U.S. connections since 2014 and has earned more than $1 billion in fees, the Commodity Futures Trading Commission alleged in its own civil lawsuit.