United States District Judge John G. Koeltl has ruled that BitMEX, the well-known derivatives exchange, will pay a $100 million fine for violating the Bank Secrecy Act (BSA) over a five-year period. The penalty follows a long-standing legal battle in which BitMEX was accused of ignoring U.S. anti-money laundering (AML) regulations.
BitMEX’s Response to the Ruling
In its statement, BitMEX acknowledged the ruling and noted that the $100 million fine is smaller than the initial $200 million demand from the U.S. Department of Justice (DoJ). The exchange highlighted that the fine was lower than the $110 million that was initially agreed upon but deemed insufficient by Judge Koeltl. BitMEX also stated that the fine covers violations related to its operations from 2015 to 2020, during which it generated over $1.3 billion in revenue while bypassing U.S. regulations.
In addition to the fine, HDR Global Trading Inc., BitMEX’s parent company, will face a two-year probationary period.
Background on the Violations
The charges stem from BitMEX’s operation without proper Know-Your-Customer (KYC) checks and illegal access for U.S. users. Despite being required to obtain approval from the U.S. Commodity Futures Trading Commission (CFTC) to offer services in the U.S., BitMEX continued to allow U.S. residents to trade on its platform, making up about 11.5% of its user base at the time. In 2024, BitMEX pleaded guilty to violating the BSA, with its founders, Arthur Hayes, Samuel Reed, and Benjamin Delo, admitting to these infractions.
Wider Crackdown on Crypto Exchanges
This case is part of a broader trend of tightening regulation on cryptocurrency exchanges. In addition to the BitMEX case, the U.S. government has been cracking down on other exchanges, including Robinhood, which paid $45 million in a settlement with the SEC over securities violations. Similarly, exchanges like Kucoin and Paxful have faced legal challenges for violating regulatory requirements, including bypassing KYC procedures.
The U.S. government’s swift actions aim to ensure investor protection and combat illegal activities within the cryptocurrency sector. With this ruling, the crypto ecosystem will likely continue to experience increased scrutiny and regulatory action.
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