The cryptocurrency market has again been mired in controversies, this time involving one of the most high profile companies in the industry. Recent reports revealed that prosecutors in the United States have filed criminal charges against crypto exchange primo BitMEX for flouting money laundering rules.
The case has sent shockwaves across the industry with the decision splitting the industry. According to the report, the top officials of Bitmex were all involved in the charges, including chief executive Arthur Hayes.
In the report put forth by the US Department of Justice, the judges have charges Arthur Hayes, Samuel Reed, Benjamin Delo, and Gregory Dwyer, BitMEX’s first employee who eventually became the company’s head of development. All four officials were accused of violating the Bank Secrecy Act instituted by the US federal government.
Federal prosecutors in Manhattan stated that the cryptocurrency exchange had taken few or no steps to limit customers on the platform even after warnings of hacks. The hacks were being investigated by the DoJ with the body suspecting that BitMEX was being used to launder money by citizens of countries like Iran. One of the reports said that “BitMEX made itself available as a vehicle for money laundering and sanctions violations”.
Another crucial point that brought BitMEX under the scanner was the fact that the company was incorporated in Seychelles even though its officers were in New York and Hong Kong. Earlier recordings have Hayes clearly claiming that bribing officials in Seychelles would be as expensive as buying a coconut. Hayes and his team of lawyers have come out strongly against the charges with the initial defense expected to be vigorous.
As BitMEX plans to defend itself, the Commodity Futures Trading Commission [CFTC] has filed a separate civil lawsuit to halt BitMEX’s US derivatives business. The CFTC was also joined by the Federal Bureau of Investigation [FBI] Assistant Director William Sweeney in the case against BitMEX. Sweeney was livid that the company officials had openly talked about bribing government officials and assured the public that justice would be served.
