BitMEX Fined $100 Million For Money Laundering Violations

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United States District Judge John G. Koeltl has ordered BitMEX Derivatives Exchange to pay $100 million for violating the Bank Secrecy Act (BSA) in the country. The Judge considered this penalty a sufficient penance for 5 years. It consistently violated anti-money laundering statutes.

BitMEX Breaks Silence on New Penalty

Before now, the crypto exchange had wrapped up a multi-year legal battle related to anti-money laundering violations. However, Judge Koeltl claimed that the initial $110 million fine agreed upon by BitMEX is insufficient. He based his stance on the exchange bringing in as much as $1.3 billion in revenue as it flouted U.S. regulations over 5 years.

Commenting on the order from Judge Koeltl, the trading platform said this penalty is for an offense that its founders were fined for in 2022. In a statement on Wednesday, the exchange said this $100 million fine comes as a smaller penalty than the initial $200 million demanded by the Department of Justice (DoJ).

In addition to this verdict, HDR Global Trading Inc., BitMEX’s parent company, will face a two-year probationary period.

BitMEX Pleads Guilty to BSA Violations

In July 2024, BitMEX pleaded guilty to violating the United States Bank Secrecy Act. The U.S. Attorney’s Office for the Southern District of New York announced that it flagged the exchange’s willful violation of extant laws.

As far back as 2020, Arthur Hayes, Samuel Reed, and Benjamin Delo had admitted to running the exchange without demanding Know-Your-Customer (KYC) checks.

Also, BitMEX illegally allowed US users to trade on its platform. Ordinarily, it is required to obtain approval from the U.S. Commodity Futures Trading Commission (CFTC) to offer its services in the region.

While it failed to do so, these American users accounted for about 11.5% of the exchange’s user base at the time.

U.S Authorities Combating Crypto Exchange Violations

The US government is keen on ensuring investors’ safety under its jurisdiction. Hence, it is swift to crack down on any suspicious operation in the digital asset sector beyond BitMEX exchange. As reported earlier by Coingape, Robinhood agreed to $45 million in settlement to the US SEC over securities violations.

Almost a year ago, the US Department of Justice indicted Kucoin Exchange and two of its co-founders, Chun Gan and Ke Tang. Charges against them include violating multiple laws to grow their trading platform into one of the biggest in the industry.

By the second half of 2024, US DoJ accused Paxful co-founder Artur Schaback of allowing users to bypass KYC requirements and marketed the platform as KYC-free. He ended up facing tough penalty for his action.