US hits BitMEX cryptocurrency change founders with costs | US & Canada Information
According to the prosecutor, the founders and executives of BitMEX have evaded the anti-money laundering rules. Company says will fight the allegations.
Prosecutors in the US have filed criminal charges accusing four founders and executives of BitMEX, one of the world’s largest cryptocurrency derivatives exchanges, of evading anti-money laundering rules.
The Justice Department accused Arthur Hayes, Samuel Reed and Benjamin Delo, who co-founded BitMEX in 2014, and Gregory Dwyer, its first associate and later head of business development, of violating federal banking secrecy law and conspiring to violate that law.
Hayes, 34, from Buffalo, New York and Hong Kong, is the managing director of BitMEX while Reed is its chief technology officer.
The Commodity Futures Trading Commission filed a separate civil lawsuit to cease BitMEX’s U.S. commodity derivatives business. BitMEX is the abbreviation for Bitcoin Mercantile Exchange.
“We disagree with the US government’s persistent decision to bring these charges, and we intend to vigorously defend the allegations,” said a spokesman for BitMEX’s parent company HDR Global Trading Ltd.
Dwyer’s attorney, Sean Hecker, said his client would contest the charges. Attorneys for the other individual defendants could not be identified.
An indictment filed in Manhattan federal court stated that the defendants violated their obligation to implement an anti-money laundering program with the “know your customer” requirement, which they knew was necessary because BitMEX was serving US customers.
Bribe with coconuts
Her moves allegedly included BitMEX launching in Seychelles due to its seemingly less stringent regulations, and where Hayes once boasted it would cost less to bribe authorities – just “a coconut” – than it did in the US.
Prosecutors said BitMEX ultimately evolved into a “vehicle” for money laundering and sanction violations, including claims that it was used to launder the proceeds of a cryptocurrency hack and that clients from Iran were trading on its platform.
The defendants “will soon learn that the price for their alleged crimes is not being paid in tropical fruits,” FBI Deputy Director William Sweeney said in a statement.
Each count has a maximum prison sentence of five years. Reed was arrested in Massachusetts and the other defendants are at large.
The case is US v Hayes et al., US District Court, Southern District of New York, No. 20-cr-00500.