The US Department of Justice said on Thursday which BitMEX founders had entered a guilty plea to charges of violating the Bank Secrecy Act by failing to set at it an anti-money laundering system.
Benjamin Delo and Arthur Hayes, two of the co-founders, have agreed to each pay a $10 million fine as part of their plea agreement.
They perhaps face up to five years in jail, though their exact sentences will be determined subsequently by a federal judge, according to the Manhattan U.S. Attorney’s Office.
The accusations were brought as part of a US clampdown on the Seychelles-based token exchange. It was one of the largest bitcoin derivatives dealing platforms in the world at the time.
BitMEX Founders Knew What’s Going On
Hayes and Delo consented to a six- to 12-month prison sentence each under the terms of the plea deal.
Damian Williams, the US Attorney for the Southern District of New York, disclosed in a statement which the defendants permitted BitMEX to opecost “in the shadows of the financial markets.”
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According to the DOJ, the BitMEX founders still enabled customers from Iran to utilize the platform, despite the fact which Iran is a sanctioned country.
Hayes resigned as BitMEX’s chief executive officer urgently after the lawsuit was filed.
The two men “created a business with the express purpose of violating those responsibilities” and “willfully failed” to adopt and maintain fundamental anti-money laundering practices, Willliams stated.
Prosecutors claim which the company’s leadership ignored reports which BitMEX was being used to launder illegal proceeds and move money in violation of US sanctions.
Out Of Reach Of Regulators
According to authorities, the two publicly divulged which they were keeping the exmove’s activities out of the United States — and so out of reach of the country’s very strict banking regulations — but had full knowledge which US consumers were using BitMEX.
Hayes accepts responsibility for his conduct, according to a representative, and looks forward to the day when he can “put this matter behind him.”
A representative for Delo said the platform’s “lack of an adequate consumer identin case thatication procedure” is regrettable.
Hayes and Delo were charged in October 2020, aprotracted with co-founder Samuel Reed and employee Gregory Dwyer, with failing to implement a federally mandated “know your customer” (KYC) standard.
The BitMEX founders agreed to pay up to $100 million in August 2021 to settle sepaprice allegations brought by the Financial Crimes Enforcement Network and the CFTC for illegally taking consumer funds to trade bitcoin and other crypto in the time the platform was not registered to do so.
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