Bitcoin derivatives exchange BitMEX has been ordered to pay an extra $100 million in fines, following the conclusion of a multi-year legal battle over anti-money laundering (AML) violations, according to Law360.
U.S. District Judge John G. Koeltl ruled that the initial $110 million fine BitMEX agreed to pay last year, alongside corporate guilty pleas, was insufficient. Plaintiffs allege that over a five-year period, the exchange generated approximately $1.3 billion in global revenues while disregarding U.S. regulations.
As part of the ruling, HDR Global Trading Inc., BitMEX’s parent company, will also undergo a two-year probation period.
Last July, the U.S. Attorney for the Southern District of New York announced that BitMEX pleaded guilty to violating the Bank Secrecy Act. Between 2015 and 2020, the company “willfully” failed to implement an adequate AML program. Despite claims of having systems in place, U.S. Attorney Matthew Podolsky stated these measures were “toothless.”
“Anti-money laundering and know-your-customer rules protect Americans from fraud, combat money laundering, and prevent the financing of terrorist activity,” Podolsky explained. “It is critical that all financial institutions, including cryptocurrency exchanges, comply with these rules to protect our country’s economy and national security.”
BitMEX was also found to have allowed U.S. users onto its platform—allegedly accounting for 11.5% of its user base at the time—without registering with the U.S. Commodity Futures Trading Commission (CFTC). The government argued that executives “took affirmative steps” to circumvent U.S. laws, including AML and KYC requirements, and even “lied to a bank to gain access to the U.S. financial system.”
During Wednesday’s hearing, BitMEX General Counsel Peter Wilkinson argued for a reduced sentence, stating that the case has severely impacted the company’s competitive position and regulatory standing globally. “Together, all these factors have snowballed into a virtual death knell for the business,” Wilkinson said.
The additional fines in this criminal case are separate from civil charges brought by the CFTC and the Financial Crimes Enforcement Network (FinCEN) in 2022 against the exchange and its senior executives, including co-founder Arthur Hayes, for related violations.
