On March 9, the Department of Justice from the Southern District of New York found the third founder of crypto exchange BitMEX guilty for breaching U.S. anti-money laundering (AML) rules.
According to the U.S District court, Samuel Reed has violated the Bank Secrecy Act (BSA) by “willfully failing to establish, implement and maintain” an anti-money laundering program at BitMEX.
“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 U.S. law,” said U.S. Attorney Damian Williams in a statement.
As per the Act, Reed’s misconduct will be liable to pay a $10 million fine. For more severe offenses, a maximum 5 year sentence in prison is also written, which is not yet decided. His sentence will be decided by federal justice.
Reed is the third and last founder of BitMex who was found guilty of violating the U.S. Bank Secrecy Act (BSA) in federal court. Last month, two founders, Arthur Hayes and Benjamin Delo pled guilty for the same.
All three founders have failed to submit a file on a suspicious activity reported on their platform since 2014. The DoJ stated that in 2018 the platform used to launder proceeds of a cryptocurrency hack, but Reed didn’t report this incident.
