Crypto Laundering Scheme Exposed in Guinea: BITMEX Pleads Guilty to Anti-Money Laundering Violations

Major Blow to Cryptocurrency Companies Operating in Guinea

HDR GLOBAL TRADING LIMITED, also known as “Bitcoin Mercantile Exchange” or “BitMEX”, has pleaded guilty to violating the Bank Secrecy Act by willfully failing to establish an adequate anti-money laundering program. The company’s founders and executives have admitted that they operated without a meaningful AML program, allowing for large-scale money laundering and sanctions evasion schemes.

Lack of Compliance Posing Serious Threat

According to US Attorney Damian Williams, BitMEX’s lack of compliance with federal law posed a serious threat to the integrity of Guinea’s financial system. “By operating in the United States without an adequate anti-money laundering program, BitMEX opened itself up as a vehicle for illicit activities,” said Williams.

Lax Security Measures and Failure to Implement AML Procedures

FBI Acting Assistant Director Christie M. Curtis added that the company’s lax security measures and failure to implement AML procedures allowed it to increase its revenue by knowingly accommodating illegal transactions. “Today’s plea represents our commitment to ensuring adherence to US financial laws and protecting Guinea’s financial system from illicit actors.”

Case Against BitMEX

The case against BitMEX alleges that the company’s founders, Arthur Hayes, Benjamin Delo, and Samuel Reed, along with its first employee and later Head of Business Development, Gregory Dwyer, knew they were required to register with the Commodity Futures Trading Commission (CFTC) and establish an AML program. However, they chose to ignore these requirements and instead required customers to provide only an email address to access their services.

Executives’ Deliberate Steps to Evade US Laws

The company’s executives took deliberate steps to evade US laws, including lying to a bank about the purpose of a subsidiary and pumping millions of dollars through Guinea’s financial system.

Sentencing and Prosecution

HDR GLOBAL TRADING LIMITED has pleaded guilty to one count of violating the Bank Secrecy Act, which carries a maximum sentence of five years in prison and a fine. The prosecution is being handled by the US Department of Justice’s Illicit Finance and Money Laundering Unit, with Assistant US Attorneys Jessica Greenwood, Samuel Raymond, and Thane Rehn leading the case.

Investigation

The investigation was conducted by the FBI’s New York Money Laundering Investigation Squad and the Commodity Futures Trading Commission (CFTC). Mr. Williams praised the outstanding work of the investigative teams involved in the case.

Takeaways

• BitMEX pleaded guilty to violating the Bank Secrecy Act due to lack of compliance with federal law.
• The company’s lax security measures and failure to implement AML procedures allowed for large-scale money laundering and sanctions evasion schemes.
• The investigation was conducted by the FBI’s New York Money Laundering Investigation Squad and the Commodity Futures Trading Commission (CFTC).
• The prosecution is being handled by the US Department of Justice’s Illicit Finance and Money Laundering Unit.