The current year is proving to be increasingly obstructed for the cryptocurrency industry. At one end, there is the issuance of a crypto EO by the United States government, and on the other hand, the regulatory agencies are cracking down on the exchange platforms. The Department of Justice and Commodity and Futures Trading Commission charged the 3 co-founders of BitMEX in October 2020.
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The charges prosecuted the defendants for willful negligence of implementing anti-money laundering laws on their platform. According to the recent media reports, the third and final co-founder of BitMEX exchange Samuel Reed pleaded guilty to the charges yesterday. The case may strengthen the position of centralized regulatory agencies to have a stronger say in the digital assets markets.
Bank Secrecy Act Violations
With the recent developments in the BitMEX case, the future of the said cryptocurrency exchange seems bleak. The cryptocurrency exchange is owned by HDR Global Trading Limited, and its headquarters is located in an East African country called Seychelles. Meanwhile, the other two co-founders of BitMEX, Benjamin Delo and Arthur Hayes, have already pleaded guilty to the same charges.
All three co-founders are now convicted for legal repercussions for violating Bank Secrecy Act or BSA. It means that BitMEX management has acknowledged failure to implement any type of money laundering laws on the exchange platform. The exchange is ordered to pay $10 million in punitive damages, and Reed can face up to 5 years behind bars. However, a federal judge will rule on the prison term later.
Damian Williams, the US Attorney handling the case recently claimed that the case would set a new legislative precedent on the cryptocurrency corporations. He further explained that the lawsuit results indicated that the cryptocurrency enterprises could not keep running like an underground and lawless financial mafia that is free from any type of legal persecution and accountability.
Meanwhile, another big case of government against the DeFi sector is the Ripple and SEC lawsuit. It seems that SEC is set to lose the case. However, it is not possible to weigh on the matter before an official court ruling. BitMEX, on the other hand, also faced charges for setting up foreign accounts to encourage money laundering practices in the country.