The money laundering charges against the BitMEX executives were made 18 months ago. After a long wait, they’re finally going to trial on the 28th of March 2022. This trial was set on the 11th of May by the N.Y District Judge John Koeltl.
BitMEX is a U.S cryptocurrency exchange that facilitates peer-to-peer trading on its platform. The exchange owner is HDR Global, and they’re also controlling all the BitMEX mobile apps. Former executives, CEO Arthur Hayes, Samuel Reed, and Co-founder Benjamin Delo, face the court by next year in March.
Accusations Against the BitMEX Executives
The three top executives are facing charges of violating anti-money laundering laws and the Bank Secrecy Act. Not only the trio that has a case to answer. The head of business for the exchange, Gregory Dwyer, also has some charges against him, although his trial date is yet to be announced.
The DoJ first filed criminal charges against the four executives last year, October 1st, 2020, for operating a derivative exchange without appropriate legal backing. In 2014, Delo, Hayes, and Reed, who founded the exchange, did not register it with the U.S.A Commodity Futures Trading Commission. As a result, the CFTC also filed charges against the company for such negligence.
On the side of the DoJ, BitMEX executives didn’t implement the AML procedures while transacting with its U.S.A traders. This they should have done since the company was operating from Seychelles.
Facts from the Indictment
Some of the important facts about the indictment include Hayes mentioning in 2019 that it would be easier to bribe officers in Seychelles than in the U.S. As a result, the CEO stated that they preferred Seychelles as their operational headquarters. According to FBI, Hayes actually bragged about his ability to bribe authorities with what he called “a coconut.”
Moreover, CipherTrace chief financial analyst John Jefferies also confirmed that CFTC has been investigating BitMEX for almost 2 years now for accepting Americans on the platform. According to what Jefferies told our source, the exchange was given the opportunity to enhance their CIP (Customer Identification Program) to remove U.S clients.
As for now, defense motions will be filed next month, while other motions will be lodged by September. If the executives are convicted of the crimes, they’ll likely incur a fine of $250,000 and 5 years in prison.
In another news, the exchange disclosed earlier this year that it had recruited Chainalysis. They did so to identify, investigate and prevent all forms of illegal transactions on the platform.