BitMEX has admitted that it violated the United States Bank Secrecy Act, amid the ongoing lawsuits versus Coinbase and Binance.
After multiple crypto hedge funds and FTX collapsed in 2022, the United States SEC decided to crack the whip. And they have been relentless, so much so that Gary Gensler is widely thought to be anti-crypto despite his previous Bitcoin evangelism at MIT.
The regulator claims they are protecting citizens against rogue players in crypto. Several crypto firms and exchanges have been summoned and charged.
BitMEX Admits To Breaking The Bank Secrecy Act
Yesterday, BitMEX, one of the first Bitcoin and crypto perpetual exchanges, admitted to violating the United States Bank Secrecy Act (BSA) after failing to implement proper anti-money laundering (AML) controls.
Subsequently, in their charge, the Department of Justice (DOJ) said the perpetual exchange, while serving United States clients, was not stringent enough, only requiring them to submit email addresses for sign-up.
Their decision means they deliberately bypassed critical KYC protocols, allowing some people to launder money through the exchange.
According to authorities, this was a serious offense, posing a significant threat to the integrity of the United States and the global financial system.
As a result, BitMEX had to pay for their “intentional non-compliance,” as Christie M. Curtis, the Acting Assistant Director of the FBI.
BitMEX insists they have since fixed the issue and are now compliant, adding that their founders, including Arthur Hayes, were charged in 2020 and received their sentencing in 2022 for similar offenses.
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Crypto Crackdown In The United States
Looking at recent events, BitMEX is not the only exchange facing off with United States regulators.
At this point, the Securities and Exchange Commission (SEC) has sued multiple exchanges, including Coinbase, Kraken, and Binance.
Even pro-crypto firms like ConsenSys have not been spared.
Markedly, the SEC claims that crypto exchanges enable the trading of unregistered securities. In its lawsuit against Binance and Coinbase, the regulator said several coins, including Solana and Cardano, were examples of unregistered securities offered to United States clients.
Even so, there have been small wins here and there.
Recently, a United States judge, Amy Berman Jackson, dismissed part of the regulator’s lawsuit against the world’s largest exchange, Binance. For example, the judge said the regulator can’t bar the trading of BNB in the secondary markets.
The SEC will continue to charge Binance on some of their allegations. Moreover, the court said the regulator can bring enforcement actions against rogue crypto entities.
Today, I stepped down as CEO of Binance. Admittedly, it was not easy to let go emotionally. But I know it is the right thing to do. I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself.
Binance is no longer a baby. It is…
— CZ 🔶 BNB (@cz_binance) November 21, 2023
It should be noted that Binance founder Changpeng Zhao had to step down as CEO in 2023 and currently serves a 4-month prison sentence.
Even so, the United States is formulating laws to promote crypto in the country. Though the Biden administration is taking a tough stance on crypto, most holders and supporters in the country think the tech is here to stay.
Most importantly, the upcoming presidential election in November will be a crucial decider. Donald Trump’s supporters say crypto will thrive should he win.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
