US authorities have sentenced a 36-year-old Florida resident to six months of home detention and two years of probation for willfully violating the country’s Bank Secrecy Act (BSA). The convict knowingly failed to implement and maintain an AML program at his cryptocurrency company Bitcoin Mercantile Exchange (BitMEX). Note that the convict was the CEO and one of the three co-founders of BitMEX.
BitMEX operated as an online cryptocurrency derivatives exchange in the US, even though both the company and the convict fraudulently represented that it did not have any operations in the US. During 2015-20, the convict willfully did not implement and maintain an AML program at BitMEX. The identities of BitMEX customers were also not being verified in this period. This effectively made BitMEX a money laundering platform. In fact, the convict actively advertised the lack of an AML or KYC program in his company.
BitMEX has settled with the US Department of Treasury, without agreeing with or denying the allegations against it. Meanwhile, the convict will pay a fine of $10 million to match his gains from the violations.
Source: US Department of Justice