A federal judge has ordered HDR Global Trading Limited, the parent company of cryptocurrency exchange BitMEX, to pay a $100 million fine and serve two years of unsupervised probation. This judgment, handed down on January 15 in the US District Court for the Southern District of New York, follows the exchange’s 2022 guilty plea for violating the US Bank Secrecy Act (BSA).
Lack of AML Compliance
BitMEX was found guilty of operating without a meaningful Anti-Money Laundering (AML) program and failing to meet Know Your Customer (KYC) standards. Instead, the platform relied solely on email addresses from users, which federal authorities said “flaunted” BSA requirements.
In a statement to its users following the ruling, BitMEX called the charges “old news” and expressed disappointment about the additional financial penalty, although it noted that the $100 million fine was significantly less than the $417 million initially sought by the Department of Justice (DOJ).
The DOJ had alleged that BitMEX unlawfully gained $155 million from US customers between 2015 and 2020 as part of its BSA violations.
Criminal and Civil Settlements
The January 15 decision is the latest chapter in a long-running legal battle involving BitMEX and its executives. In 2022, BitMEX co-founders Arthur Hayes, Benjamin Delo, and Samuel Reed, along with an employee, Gregory Dwyer, were sentenced to probation for violating the BSA.
In earlier civil cases:
- 2022: Hayes, Delo, and Reed agreed to pay $30 million in penalties to settle charges brought by the US Commodity Futures Trading Commission (CFTC).
- 2021: BitMEX settled with both the CFTC and the US Financial Crimes Enforcement Network (FinCEN) for $100 million in consent payments.
The January 15 ruling appears to mark the final phase of US legal proceedings against BitMEX, concluding nearly four years of litigation.
BitMEX’s legal troubles led to significant leadership changes. In 2020, Arthur Hayes stepped down from his role as CEO and later surrendered to US authorities in 2021 over BSA-related charges.
