A U.S. federal judge has fined cryptocurrency exchange BitMEX $100 million for deliberately neglecting anti-money laundering (AML) laws to boost its revenue. The ruling, announced on Wednesday by the Department of Justice, is part of an ongoing crackdown on compliance violations in the cryptocurrency sector.
Background and Sentencing
U.S. District Judge John Koeltl in Manhattan issued the sentence, which includes a $100 million fine and two years of probation for BitMEX, officially known as HDR Global Trading. The penalty follows BitMEX’s guilty plea in July 2022.
The exchange and its founders—Benjamin Delo, Arthur Hayes, and Samuel Reed—had previously paid $110 million in related criminal and civil cases. The founders, who entered guilty pleas in 2022, also received probation sentences.
Allegations of Negligence
Prosecutors accused BitMEX of willfully violating the Bank Secrecy Act between 2015 and 2020. The company allegedly failed to implement AML and “know your customer” (KYC) protocols, creating an environment where money laundering could thrive.
“BitMEX turned a blind eye to its obligations, effectively operating as a platform for illegal financial activities,” prosecutors stated.
Civil Settlements and Regulatory Compliance
In 2021, BitMEX agreed to pay up to $100 million to settle civil charges brought by two U.S. regulators. These charges stemmed from improper customer screening and trading activity without proper registration.
BitMEX acknowledged its compliance shortcomings, stating, “We were slow to adapt to regulatory changes during a time of uncertainty in the cryptocurrency industry.”
Prosecutors Sought a Higher Fine
Federal prosecutors initially sought a $417 million fine in the criminal case, arguing that BitMEX failed to demonstrate full accountability. However, BitMEX contended that the $100 million fine, combined with its previous payouts, adequately addressed its past violations.
BitMEX’s Response and Future Compliance
BitMEX emphasized its efforts to rectify past mistakes, stating that it has transformed into a compliant business. “We have made significant changes to ensure compliance with regulatory frameworks and will continue to improve our processes,” the company said in a statement.
