A federal judge handed cryptocurrency exchange BitMEX a $100 million fine, bringing a years-long legal battle to a close. The penalty involves the firm’s guilty plea in 2022 for violating the US Bank Secrecy Act (BSA), a charge that revolved around its failure to implement sufficient Anti-Money Laundering (AML) protocols.
A Reduced Penalty in a Lengthy Dispute
BitMEX's insufficient AML measures were at the center of the case. Instead of following Know Your Customer (KYC) standards, the exchange required only email addresses from its users, a move the US Attorney’s office deemed a disregard for legal requirements.
Originally, the US government pursued a $417 million penalty, alleging BitMEX unlawfully gained $155 million from US sources between 2015 and 2020. The final judgment, however, settled on $100 million, a figure significantly lower than the initial demand.
BitMEX, operated by HDR Global Trading Limited, acknowledged the fine but framed it as a victory of sorts. “The amount is substantially less than what the Department of Justice has been pursuing us for over three years,” the firm said, adding that taxpayer resources might have been better spent elsewhere.
We’ve always made it a priority to stay fully transparent with our users.In response to the sentence received by HDR Global Trading Limited (HDR) today, delivered by the U.S. Southern District Court, please see our blog announcement below.A message to our users:… pic.twitter.com/zVyKt8lMbF
— BitMEX (@BitMEX) January 15, 2025The company shared: “Whilst we are disappointed to learn of the imposition of an additional financial penalty, the amount is substantially less than what the Department of Justice has been pursuing us for over three years.”
“This process has run on for years, during which the DOJ first asked for over USD 200 million of new money to settle a plea deal—once we refused this ridiculous offer, they then sought a penalty of approximately USD 420 million in the sentencing proceedings.”
Criminal and Civil Penalties Close the Case
This judgment concludes both criminal and civil actions against BitMEX and its executives. In prior settlements, BitMEX paid $100 million in penalties to US regulatory agencies, including the Commodity Futures Trading Commission and the Financial Crimes Enforcement Network.
Meanwhile, co-founders Arthur Hayes, Benjamin Delo, and Samuel Reed were sentenced to probation in 2022 and fined $30 million collectively for their roles in the violations.
Despite the legal troubles, BitMEX emphasized its transformation. The company points to its updated compliance programs, which include advanced KYC and AML measures.
This article was written by Jared Kirui at www.financemagnates.com.
