After several failed settlement attempts, the money laundering lawsuit of the former exchange executives Bitmex will eventually take place. So decided on May 11, the judge of the district of New York John Koeltl. The accused who are the CEO Arthur hayes, the co-founder Benjamin delo and the technical director Samuel reed will therefore have to prepare to respond in the coming months to the charges against them. Back to the facts.
Breach of bank secrecy and anti-money laundering laws
In 2014, Mr. Hayes, M. Delo and M. Reed found the exchange Bitmex without bothering to register with the Commodity Futures Trading Commission (CFTC). Supported by the Department of Justice of the United States, the body decides to prosecute the leaders of the exchange on October 1, 2020. In addition to the lack of registration, the latter are accused of having violated the law on banking secrecy and the laws against money laundering. They are thus accused of knowingly cooperating with traders based in the United States. without having complied with the relevant requirements. The indictment document also alludes to acts of corruption carried out by Mr. Hayes.
The latter would be like this boasted of having corrupted the regulators of the Seychelles where the exchange is based while recognizing that this action would have been more complicated to carry out in the United States. Faced with the imminent scandal which risked leading to the exchange, the latter proceeded to a reshuffle of its management team. This was manifested by the resignation of Mr. Hayes of his position as CEO followed by the departure of his co-defendants, Mr. Delo and Mr. Reed. They will now have to appear in court on March 28, 2022 according to the last decision taken by the justice in the context of this case.
A maximum sentence of five years in prison and a fine of $ 250,000
Chief Financial Analyst of CipherTrace, John jefferies teaches us that Bitmex had been under investigation by the CFTC since early 2019. The exchange, which has had ample time to comply with CFTC requirements, then did nothing done to effectively exclude US customers. This neglect could ultimately cost these former leaders dearly. The latter risk a maximum penalty of five years in prison and a fine of $ 250,000 if convicted. Their representatives will however be able to file potential motions before the start of the trial, in June and September.
This affair is a reminder for future projects in the cryptographic space which feed the ambition to develop outside the regulatory framework of certain countries. The anonymity and lack of transparency that surround some financial transactions in the sector have made it an instrument for criminals around the world. This had also prompted the United States to update its anti-money laundering and anti-terrorist financing laws.
The comments and opinions expressed in this article are those of the author alone, and should not be considered as investment advice. Do your own research before making any investment decisions.