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BitMex exec pleads guilty in violation of Anti-Money Laundering Act

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Along with three other BitMEX co-founders who have previously acknowledged breaking U.S. law, a senior employee of the cryptocurrency futures exchange has pleaded guilty in New York to failing to implement an anti-money-laundering program.

The United States Attorney for the Southern District of New York stated on Monday that a high-ranking employee at the offshore cryptocurrency derivatives exchange, Gregory Dwyer, entered a plea of guilty to breaking a federal anti-money laundering rule.

Dwyer admitted to breaking the Bank Secrecy Act by “failing to build, implement, and manage an anti-money laundering program” at BitMEX, where he formerly oversaw business development.

In a press release, U.S. Attorney Damian Williams stated,

“Today’s plea reflects that employees with management authority at cryptocurrency exchanges, no less than the founders of such exchanges, cannot willfully disregard their obligations under the Bank Secrecy Act.”

Lack of KYC aided BitMEX in criminal activity

The three co-founders of the company, Arthur Hayes, Benjamin Delo, and Samuel Reed, had previously been convicted guilty by judgments obtained by the U.S. Attorney. According to prosecutors, BitMEX’s absence of know-your-customer (KYC) procedures allowed the business to flourish as a hub for illegal conduct, including as money laundering and sanction evasion.

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Arthur Hayes, former CEO of BitMEX

Two years ago, BitMex was hit with civil and criminal accusations by the CFTC, DOJ, and FinCEN after the company allowed Americans to trade cryptocurrency futures on its platform without having a U.S. registration or using poor know-your-customer (KYC) procedures. Although the agencies ultimately reached a $100 million settlement with the exchange last summer, the accusations led to a shift in the exchange’s management.

The Commodity Futures Trading Commission (CFTC) and the Financial Crimes Enforcement Network (FinCEN) filed civil lawsuits against the four men as well as BitMEX and other business entities, which resulted in financial penalties. Hayes, Reed, and Delo each had to pay $10 million after BitMEX was compelled to pay the regulators $100 million.

BitMEX Co-founder Gets 30 Month Probation, Tackles Prison Time

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Benjamin Delo, the co-founder of cryptocurrency exchange BitMEX, was sentenced to 30 months of probation for breaching the Bank Secrecy Act (BSA), an anti-money laundering statute.

Following his guilty plea in February to charges of “willfully neglecting to establish, administer, and maintain an Anti-Money Laundering (AML) program” in his capacity at BitMEX, the sentence was handed down on June 15th in a federal court in New York.

Prosecutors suggested that Delo should serve a year in prison or at the very least be sentenced to two years of probation and six months of home detention, as former CEO Arthur Hayes was in May.

BitMEX’s Benjamin escapes jail time

Delo’s reduced term brings an end to a legal drama that began in October 2020, when co-founders Hayes and Samuel Reed, as well as BitMEX’s first formal employee Gregory (Greg) Dwyer, were all prosecuted with similar crimes.

Delo’s offenses were described by Judge John Koeltl as “extremely significant,” and he admitted that he knew BitMEX was infringing US rules by failing to build an anti-money laundering (AML) and know-your-customer (KYC) system.

However, Judge Koeltl acknowledged that the exchange later took steps to correct the problem and became compliant.

Judge Koeltl, a British citizen who lives in Hong Kong, ordered that Delo be permitted to spend his probationary sentence there.

The fact that Delo paid a $10 million fine to settle a court judgment from May in a civil lawsuit brought by the Commodity Futures Trading Commission (CFTC) for violating parts of the Commodity Exchange Act was also taken into account by Judge Koeltl.

After the sentencing hearing, a spokesperson for Delo’s legal team claimed the court rejected “the government’s opportunistic attempt to misrepresent the gravity of the Bank Secrecy Act charge in this instance.”

According to the Sydney Morning Herald, former BitMEX head of business development Greg Dwyer, who now dwells in Bermua, is in discussion with the New York federal court to prolong a deadline for filing pre-trial documentation.

BitMEX Co-founder Arthur Hayes Dodges the Prison Bullet

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Arthur Hayes, co-founder of Bitmex, will not go to prison for breaking the US Bank Secrecy Act. Instead, the former CEO of Bitmex cryptocurrency exchange was sentenced to “six months of house arrest and two years of probation.” Hayes has also agreed to pay a $10 million penalty.

The creator and former CEO of bitcoin derivatives exchange Bitmex has been punished for breaching the Bank Secrecy Act, according to the US Department of Justice (BSA). In February, Hayes admitted to breaking the Bank Secrecy Act.

“Hayes, 36, of Miami, Florida, was sentenced to six months of home detention and two years of probation. Hayes also agreed to pay a fine of $10 million dollars representing his pecuniary gain from the offense.”

Department Of Justice

BitMEX CEO Arthur Hayes admits to his doings

Hayes “willfully disobeyed US law that compels businesses to do their share to assist prevent crime and corruption” while establishing a cryptocurrency trading platform “that profited him millions of dollars,” according to US Attorney Damian Williams.

“He purposefully failed to implement and maintain even basic anti-money laundering rules, allowing Bitmex to operate as a platform in the shadows of the financial markets,” Williams continued.

Benjamin Dalo and Sam Reed, two other Bitmex co-founders, also pled guilty and are expected to be sentenced soon.

The two other co-founders, like Hayes, have been sentenced to pay a civil monetary penalty of $10 million apiece.

Lawyers for the 37-year-old American entrepreneur filed a motion for probation with no home detention or community confinement after reaching a plea agreement that would result in a jail term of six to twelve months under federal guidelines.

The authorities claimed that BitMEX had become a “money-laundering platform” due to their incapacity to provide know-your-customer (KYC) and anti-money laundering (AML) services.

Following the lawsuit, the co-founders resigned from the company, and BitMEX agreed to pay a $100 million settlement to the US Commodity Futures Trading Commission (CFTC) and the Financial Crimes Enforcement Network (FCEN) (FinCEN).

For failing to adopt an anti-money laundering strategy at the exchange, Arthur Hayes, former CTO Samuel Reed, and co-founder Benjamin Delo were fined $10 million.

BitMEX Spot Trading Goes LIVE; More Details

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BitMEX, one of the world’s largest digital asset trading platforms, has announced the launch of its Spot Exchange available for both retail and institutional traders. With the launch, the firm hopes to enter the top ten global spot exchanges, as it expands its product offering.

Besides that, it also offered an opportunity for traders to win a prize pool valued at $1,000,000 USD. The launch of the BitMEX Spot Exchange marks a significant step that aims to provide cutting-edge products to crypto traders.

As per the blog, the exchange currently extends support to seven pairs of cryptocurrencies, including Bitcoin [BTC], Ethereum [ETH], Chainlink [LINK], Uniswap [UNI], Polygon [MATIC], Axie Infinity [AXS)], and ApeCoin [APE], all against Tether [USDT]. 

But this is just the beginning of spot trading on the platform, the blog added. More cryptocurrencies and trading pairs including BMEX tokens would be added and are due to arrive in the coming months.

“Users who prefer to trade on the go will soon be able to access BitMEX Spot via our new crypto app. More on this to come,” the blog read.

Alexander Höpner, CEO of BitMEX, said:

Last year, we introduced our Beyond Derivatives strategy, and the launch of BitMEX Spot is the centrepiece of this vision. Today, it is one step closer to providing our users with a full crypto ecosystem to buy, sell, and trade their favorite digital assets. We will not rest as we aim to deliver more features, more trading pairs, and more ways for our clients to take part in the crypto revolution.

BitMEX’s Former CEO Faces Criminal Charge

The launch comes amidst its ex CEO’s high-profile legal battle with the CFTC, Commodity Futures Trading Commission, an agency that regulates the U.S. derivatives markets.

BitMEX co-founder and former CEO, Arthur Hayes, settled his civil charges for $10 million and pleaded guilty to criminal charges brought by the DOJ.  He now faces sentencing in the criminal case.

BitMEX or Bitcoin Mercantile Exchange, was founded in 2014 and is one of the world’s largest and oldest crypto trading entities dealing in futures contracts and other derivative products tied to the value of cryptocurrencies.

Arthur Hayes, Ex-BitMEX CEO, Asks for Freedom

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In preparation for his sentencing, later this month, former BitMEX co-founder and CEO Arthur Hayes is requesting no jail time and permission to live abroad.

After striking a plea agreement that would result in a jail term of six to twelve months under federal guidelines, lawyers for the 37-year-old American entrepreneur submitted a motion for probation with no home detention or community confinement, according to Bloomberg.

The authorities argued that their inability to implement the know-your-customer (KYC) and AML services had in effect rendered BitMEX “a money-laundering platform.”

Following the litigation, the co-founders resigned from their positions in the firm, and BitMEX agreed to pay the US Commodity Futures Trading Commission (CFTC) and the Financial Crimes Enforcement Network $100 million in settlement (FinCEN).

Arthur Hayes was fined $10 million, along with former CTO Samuel Reed and BitMEX co-founder Benjamin Delo, for failing to implement an anti-money laundering policy at the exchange.

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Arthur Hayes, Ex-BitMEX CEO, Asks for Freedom 3

Arthur Hayes’s mother showers support

Arthur Hayes got support from his mother and followers in the form of a 65-page proposal with “photographs and letters,” which his attorneys handed to the judge.

“This historic case has already had an incredible and well-publicized impact on Mr. Hayes’s personal life and the BitMEX business that he co-founded,” stated the motion.

“The chances and advantages of operating in the United States are countless, but they carry with them the need for those firms to do their part to help drive out crime and corruption.”

Prosecutor Damian Williams said after the co-founders’ guilty plea in February

“Arthur Hayes and Benjamin Delo built a company with the express purpose of evading those obligations; they willfully failed to implement and maintain even basic anti-money laundering policies.” They made it possible for BitMEX to operate as a platform outside of the financial markets.”

“The guilty pleas announced today demonstrate the Office’s ongoing commitment to investigating and prosecuting money laundering in the cryptocurrency sector.”

Hayes made some wild forecasts in March regarding gold and bitcoin (BTC). He talked about the future of banking in an article titled “Energy Cancelled,” predicting that gold will hit $10,000 and bitcoin will reach $1 million.

BitMEX resolves case with CTFC, FinCEN in $100M settlement

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Prominent crypto exchange, BitMEX is once again making headlines after it came to a settlement with the Commodity Futures Trading Commission [CFTC], and the Financial Crimes Enforcement Network [FinCEN] of the United States.

Back in 2020, BitMEX made immense news after it fell under the purview of the Commodity Futures Trading Commission [CTFC] for its weak anti-money laundering protocols. Several executives of the exchange were arrested by the US government over the same. The platform’s former CEO, Arthur Hayes was one among them. While Hayes found his way out following a $10 million bail, the trial of the other founders, Ben Delo well as Sam Reed is said to kickstart in March 2022.

As this case persists, the exchange went ahead and decided to pay the financial watchdogs a whopping $100 million. The CTFC shared an announcement revealing the same and the reason behind the penalty. The platform will reportedly be paying this amount for carrying out functions of a crypto platform along with anti-money laundering violations.

BitMEX settles with CTFC and FinCEN

Alongside the $100 million, BitMEX would have to recruit an independent consultant in order to carry out a historical analysis of all the transactions to look for any suspicious activity in the past that had been overlooked.

Acting Chairman Rostin Behnam addressed the same and stated,

“This case reinforces the expectation that the digital assets industry, as it continues to touch a broader pool of market participants, takes seriously its responsibilities in the regulated financial industry and its duties to develop and adhere to a culture of compliance. The CFTC will take prompt action when activities impacting CFTC jurisdictional markets raise customer and consumer protection concerns.”

Additionally, the five other companies part of the settlement were namely, HDR Global Trading Limited, 100x Holding Limited, ABS Global Trading Limited, Shine Effort Inc Limited, and HDR Global Services (Bermuda) Limited.

BitMEX logo to be featured on AC Milan jersey following its latest deal

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Crypto is going places and this crypto exchange is leading the way. BitMEX, a prominent cryptocurrency exchange revealed that it had joined hands with AC Milan as a sleeve partner.

Crypto and sports go way back. The sports industry has been welcoming and accommodating to the crypto-verse. An array of sports clubs have made partnerships and embraced cryptocurrencies. The frequency of this has certainly increased over the last couple of months. Further elevating the presence of crypto in the sports sector, BitMEX signed a multi-year partnership with AC Milan.

In a recent press release, AC Milan revealed that the crypto platform was the very first sleeve partner as well as its official crypto trading partner.

BitMEX becomes AC Milan’s first sleeve partner

The crypto exchange’s logo will reportedly be seen on the sleeves of both the women’s as well as the men’s teams. Additionally, the logo will also be featured on AQM, its eSports team.

The BitMEX-featured jerseys would go live starting from 23 August 2021.

The CEO of BitMEX, Alexander Höptner, spoke about the platform’s debut into the sports sector and stated,

“Our partnership with AC Milan is the start of a hugely exciting new chapter for BitMEX as we look to ramp up brand awareness and increase understanding of crypto. AC Milan is one of the world’s most progressive football clubs, and combined with its rich footballing heritage boasts extraordinary reach and engagement with fans globally. We felt we’d come home when we started talking to the Club, and we can’t wait to start interacting with the global Rossoneri family.”

Not too long ago, another prominent crypto exchange, FTX decided to roll out an NFT marketplace exclusively for the sports sector. Turns out, the ardor for crypto in the sports industry still remains high.

With football being one of the most-watched and sought-after sport, BitMEX’s association with a prominent member of the industry would not only boost its popularity but also pave the way for elevated interest in crypto.

BitMEX receives ISO information security certification

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Seychelles-headquartered BitMEX has announced receiving International Organisation for Standardisation [ISO] information security certification on the 7th of June. ISO is essentially a global body that determines and reviews crucial standards across several different industries.

The official announcement of the exchange read,

“It’s difficult to overstate the importance of information security for a platform like BitMEX. Traders trust us because of our track record on security – we have never lost a single Satoshi through intrusion or hacking. But security is never a static process and in order to continue to set the bar as high as possible, we sought – and were awarded – one of the most rigorous certifications: ISO/IEC 27001.”

According to the cryptocurrency platform, ISO/IEC 27001 is much more than just an audit of IT systems. This particular certification requires a comprehensive examination of a particular organization’s information security risks such as threats, vulnerabilities, and impacts.

ISO/IEC 27001 also deals with the evaluation of a bespoke, comprehensive set of information security controls and risk mitigation tools as well as carrying out a thorough management process to make sure information security standards continue to advance and develop.

BitMEX’s legal issues

This news comes after the date for the derivatives platform’s money laundering trial was set to start in March next year.

The crypto derivatives platform had been on the business end of multiple legal cases and will face money laundering charges eighteen months after the charges were first announced.

2020 has been a challenging year for BitMEX and its founders. Is Co-founder and ex-CEO Arthur Hayes, co-founder Benjamin Delo, and CTO Samuel Reed, BitMEX’s head of business development, Gregory Dwyer, all faced charges of allegedly violating multiple regulatory requirements at once.

The US Commodity Futures Trading Commission [CFTC], in particular, accused the firm of functioning an “unregistered trading platform” that did not offer the essential measures to fight money laundering. As a result, the four execs lost their positions at the company.

Bitcoin scaling researcher acquires $150K grant from crypto exchange BitMEX

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Bitcoin [BTC] was the first cryptocurrency to ever exist. Despite being more than a decade old, the king coin hadn’t given up on its spot as the largest cryptocurrency, in terms of price as well as market cap. Not only did Bitcoin pave the way to an array of other cryptocurrencies, but also formulated an entire industry. The emergence of other crypto assets opened the doors to better use cases and features.

In order to make sure BTC remains on top, a Korean Bitcoin scaling researcher, Calvin Kim went on to roll out Utreexo. Aiding this initiative, prominent cryptocurrency exchange, BitMEX announced its second grant.

Bitcoin scaling solution receives aid from Human Rights Foundation

Back in August 2020, BitMEX revealed that would support Kim’s research by providing him with a grant of $30,000. In the exchange’s recent blog post it was revealed that BitMEX was offering a total of $100,000 once again to support Kim’s research up until June 2022.

The CEO of BitMEX, Alex Höptner addressed the same and noted that the exchange was glad to be funding a Korean developer like Calvin Kim as it emphasizes “Geographic Diversity Of Bitcoin Development.” Elaborating on BitMEX’s latest move, Kim stated,

“I’m incredibly grateful for the financial support that BitMEX has provided me for the past year. Being financially stable has allowed me to focus more attention to furthering research and development of the Utreexo Project. Last year, I focused on prototyping a Utreexo Bitcoin Full Node, moving the project closer to reality from just a research project.”

Additionally, BitMEX went on to partner with the Human Rights Foundation to support Kim. The non-profit platform reportedly offered a lump sum grant of $50,000 to Kim in BTC. The Chief Strategy Officer of the Human Rights Foundation, Alex Gladstein suggested that the Human Rights Foundation intended to make BTC a “more useful and resilient tool of liberty for people across the globe.” He added,

“It is exciting for HRF to have the opportunity to bolster Calvin’s efforts and we hope that his work can inspire others from the region to get involved with Bitcoin and contribute to its mission to provide open-source freedom money for the world.”

Former BitMEX Exec Arthur Hayes Released On $10M Bond After Surrender

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Arthur Hayes, the former chief executive officer of the cryptocurrency exchange BitMEX, was reportedly released on a $10 million bond pending court proceedings in New York. According to an exclusive report by Bloomberg, Hayes had turned himself in Hawaii on 6th April.

Nearly xix months prior to the surrender, the federal prosecutors had levied charges against him along with three other BitMEX executives. All four of the top officials of the cryptocurrency exchange were previously accused of conspiring to evade US laws requiring the implementation of money-laundering controls.

Hayes’ lawyers claimed the former BitMEX CEO to be “self-made entrepreneur who has been wrongly accused of crimes”. They also described him as “Singaporean resident” and stated,

“Mr. Hayes voluntarily appeared in court and looks forward to fighting these unwarranted charges.”

The Commodity Futures Trading Commission [CFTC] first began investigating BitMEX in 2019. According to the prosecutors, instead of working with the US agency, the crypto exchange was allegedly involved in circumventing compliance programs and chose to base the company in Seychelles in a bid to escape regulatory scrutiny.

Along with Hayes, Ben Delo and Samuel Reed were each charged with one count of violating the Bank Secrecy Act and one count of conspiring to violate the act. Delo, who happens to be one of the co-founders of BitMEX was released on a $20 million bond after surrendering to the US prosecutors.

The company’s former CTO, Reed, on the other hand, was arrested in Massachusetts on the very same day the charges were disclosed in last October.

BitMEX’s fourth fugitive exec, Gregory Dwyer, had earlier had declined to surrender. On this regard, the lawyers had stated,

“We have been in touch with the government on Mr. Dwyer’s behalf and have informed them of his whereabouts. They are also aware that he has every intention to defend himself in court against these meritless charges and is eager to do so.”