Samuel
Reed, one of the three co-founders of the cryptocurrency derivatives exchange
BitMEX, has pled guilty to bank secrecy act violations, specifically for
violating the Bank Secrecy Act (BSA), by willfully failing to establish,
implement, and maintain an anti-money laundering program at the firm.
In
addition, according to the United States Attorney for the Southern District of
New York, the executive agreed to separately pay a $10 million criminal fine
representing pecuniary gain derived from the offense under the terms of his
plea agreement.
“Samuel
Reed has now joined his co-founders, Arthur Hayes and Benjamin Delo, in
admitting that they caused BitMEX to commit criminal violations of the
anti-money laundering laws that govern financial institutions operating in the
United States. As today’s guilty plea reflects, this Office will not permit
cryptocurrency exchanges to operate as a shadow financial system that enables
criminal actors to move their illicit proceeds without detection, and will
vigorously investigate and prosecute the operators of such exchanges who
deliberately flout US law,” Damian Williams, US Attorney, commented on the
announcement.
Reed
entered a plea of guilty today before Chief U.S. District Judge Laura T. Swain
and will be sentenced by US District Judge John G. Koeltl. In February, Arthur
Hayes and Benjamin Delo, the other two founders of BitMEX, pled guilty to the
same offense.
Both of
them have agreed to pay $10 million each as a criminal fine under the terms of
their plea agreement. In addition, they are looking at a maximum jail term of 5
years, but the judge will decide on the sentencing.
Case Background
BitMEX was
established in 2014 and gained popularity for offering 100x leverage on
cryptocurrency derivative instruments. The exchange officially withdrew its
services from the US markets around September 2015, but the prosecutors said
that both Hays and Delo knew that the move was a sham.
The
controls put in place by the exchange to prevent US customers from trading were
ineffective. According to the
prosecutors, BitMEX knew about the US-based trading and was collecting
substantial profits from their activities. They even lured US customers through
influencer marketing under their affiliate program.
Samuel
Reed, one of the three co-founders of the cryptocurrency derivatives exchange
BitMEX, has pled guilty to bank secrecy act violations, specifically for
violating the Bank Secrecy Act (BSA), by willfully failing to establish,
implement, and maintain an anti-money laundering program at the firm.
In
addition, according to the United States Attorney for the Southern District of
New York, the executive agreed to separately pay a $10 million criminal fine
representing pecuniary gain derived from the offense under the terms of his
plea agreement.
“Samuel
Reed has now joined his co-founders, Arthur Hayes and Benjamin Delo, in
admitting that they caused BitMEX to commit criminal violations of the
anti-money laundering laws that govern financial institutions operating in the
United States. As today’s guilty plea reflects, this Office will not permit
cryptocurrency exchanges to operate as a shadow financial system that enables
criminal actors to move their illicit proceeds without detection, and will
vigorously investigate and prosecute the operators of such exchanges who
deliberately flout US law,” Damian Williams, US Attorney, commented on the
announcement.
Reed
entered a plea of guilty today before Chief U.S. District Judge Laura T. Swain
and will be sentenced by US District Judge John G. Koeltl. In February, Arthur
Hayes and Benjamin Delo, the other two founders of BitMEX, pled guilty to the
same offense.
Both of
them have agreed to pay $10 million each as a criminal fine under the terms of
their plea agreement. In addition, they are looking at a maximum jail term of 5
years, but the judge will decide on the sentencing.
Case Background
BitMEX was
established in 2014 and gained popularity for offering 100x leverage on
cryptocurrency derivative instruments. The exchange officially withdrew its
services from the US markets around September 2015, but the prosecutors said
that both Hays and Delo knew that the move was a sham.
The
controls put in place by the exchange to prevent US customers from trading were
ineffective. According to the
prosecutors, BitMEX knew about the US-based trading and was collecting
substantial profits from their activities. They even lured US customers through
influencer marketing under their affiliate program.
Source: https://www.financemagnates.com/cryptocurrency/news/bitmex-co-founder-pleads-guilty-to-us-bank-secrecy-act-violations/