Bermuda Considers Licence for Bitmex Despite Money Laundering Charges

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Despite facing criminal and civil charges in the United States for allegedly facilitating money laundering, companies affiliated with cryptocurrency exchange Bitmex may still be granted a licence to operate in Bermuda. According to Government fintech consultant Denis Pitcher, if Bitmex can demonstrate it is taking corrective action to meet global anti-money laundering requirements, it could potentially receive approval from the Bermuda Monetary Authority.

Attracting Players that Meet Global Standards

“Our hope is to attract players that are looking to showcase that they are doing the right thing,” said Pitcher. “If they were looking for a jurisdiction to showcase they are doing their due diligence to a top global standard, then I would think we would be in consideration.”

Bitmex’s Presence in Bermuda

Bitmex, one of the world’s largest cryptocurrency derivatives trading platforms, is owned and operated by HDR Global Trading Ltd, a Seychelles-registered entity. The company set up an office in Bermuda in 2018 and has been hiring for various positions, including a senior business development representative.

• Pitcher noted that while Bitmex has never publicly stated its intentions to operate in Bermuda, it is not a secret that the company has established entities here.
• “They’ve never broadcast that they are in Bermuda,” he said. “But it’s never been a secret. Arthur Hayes said in 2018 that he was going to set up a company and he did.”

Commitment to Anti-Money Laundering Measures

However, Pitcher emphasized that any companies seeking to operate in Bermuda must demonstrate a commitment to anti-money laundering measures.

• “The risk you face – and this is the risk that Bitmex faces – is if you haven’t had oversight then you have to justify that you have been taking corrective action, that you have been doing your due diligence to manage global risks.”
• Bitmex has recently hired virtual assets compliance expert Malcolm Wright as its chief compliance officer following the US criminal charges.

Signs of Corrective Action

Pitcher saw this move as a sign that the company is taking steps to address its issues.

• “What that says, as an opinion of mine, is that they are taking steps to try and sustain the business,” he said. “That means they are doing everything they can to show that they are taking corrective action and part of that action could be getting regulated in a jurisdiction like Bermuda to show that they have cleaned things up because the only way they would get regulated in Bermuda is if they clean things up.”