Reported by The Block: BitMEX has been slapped with an additional $100 million fine for Bank Secrecy Act violations between 2015 and 2020.
The overseas exchange had pleaded guilty to these crimes in July 2024, and previously agreed to pay a $110 million penalty.
Bitcoin derivatives exchange BitMEX has been slapped with an additional $100 million fine after having had wrapped up a multi-year legal battle related to anti-money laundering violations, Law360 reported on Wednesday.
According to U.S. District Judge John G. Koeltl, the initial $110 million fine BitMEX agreed to pay alongside corporate guilty pleas last year were insufficient penalties. Plaintiffs allege the firm brought in worldwide revenues of approximately $1.3 billion as it flouted U.S. regulations over a five-year period.
BitMEX parent company HDR Global Trading Inc. will also face a two-year probationary period.
Last July, the U.S. Attorney for the Southern District of New York announced the exchange pled guilty to violating the Bank Secrecy Act after “willfully” failing to establish, implement and maintain an adequate anti-money laundering program between 2015 and 2020.
In addition to failing to set up a robust “know-your-customer” program, the firm also illicitly permitted U.S. users onto its platform, which allegedly accounted for roughly 11.5% of its user base at the time. What systems were in place were "toothless," Attorney for the United States Matthew Podolsky said in a statement on Wednesday,
“Anti-money laundering and know-your-customer rules protect Americans from fraud, combat money laundering and prevent the financing of terrorist activity," Podolsky said. "It is critical that all financial institutions, including cryptocurrency exchanges, comply with these rules to protect our country’s economy and national security."
If the international BitMEX exchange wanted to serve U.S. users, it would have had to register with the U.S. Commodity Futures Trading Commission, which oversees crypto derivatives trading. Instead, the government argued, executives "took affirmative steps" to "exempt BITMEX from the application of U.S. laws like AML and KYC requirements," including lying to a bank to gain access to the U.S. financial system.
During the hearing on Wednesday, BitMEX general counsel Peter Wilkinson fought for a lesser sentence, arguing the government's case has done immense damage to the company's competitive position and regulatory standing in other countries. "Together, all these factors have snowballed into a virtual death knell for the business," Wilkinson reportedly said.
The additional fines levied in this criminal case are separate from civil charges brought by the CFTC and Financial Crimes Enforcement Network (FinCEN) in 2022 against the exchange and several senior executives, including co-founder Arthur Hayes, for similar violations.
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