Arthur Hayes, Bank Secrecy Act Violation, New York 2024

BitMEX Fined $100 Million for Violating Bank Secrecy Act

New York, New York – HDR Global Trading Ltd., a/k/a ‘BITMEX’, was sentenced today to a fine of $100 million for violating the Bank Secrecy Act by willfully failing to establish, implement, and maintain an adequate anti-money laundering (“AML”) and know-your-customer (“KYC”) program.

Attorney for the United States Matthew Podolsky said, ‘Anti-money laundering and know-your-customer rules protect Americans from fraud, combat money laundering, and prevent the financing of terrorist activity. It is critical that all financial institutions, including cryptocurrency exchanges, comply with these rules to protect our country’s economy and national security.’

According to the allegations in the Information and other filings and statements made in court, Arthur Hayes, Benjamin Delo, and Samuel Reed founded BITMEX in or about 2014, and Gregory Dwyer became BITMEX’s first employee in 2015 and later its Head of Business Development. BITMEX, which has long serviced and solicited business from U.S. traders and operated through U.S. offices, was required to register with the Commodity Futures Trading Commission (“CFTC”) and to establish and maintain an adequate AML program.

BITMEX and its executives knew that because BITMEX served U.S. customers, it was required to implement an AML program that included a KYC component but chose to flaunt those requirements, requiring only that customers provide an email address to use BITMEX’s services.

The corporation entered a guilty plea on July 10, 2024, and was sentenced today to a fine of $100 million and two years’ probation. Mr. Podolsky praised the outstanding investigative work of the Federal Bureau of Investigation’s New York Money Laundering Investigation Squad.

The prosecution is being handled by the Office’s Illicit Finance & Money Laundering Unit. Assistant U.S. Attorneys Jessica Greenwood and Thane Rehn are in charge of the prosecution.

Defendant: HDR Global Trading Ltd. (a/k/a ‘BITMEX’)

Criminal Charges: Violating the Bank Secrecy Act

City and State: New York

Date: July 10, 2024 (sentencing date)

Sentence: $100 million fine and two years’ probation

Dollar Amount: $100 million

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