BitMEX co-founder Samuel Reed fined $10M, pleads guilty to violating US laws

abdelaziz Fathi

The third founder of crypto exchange BitMEX, Samuel Reed, pleaded guilty in a federal court to violating anti-money-laundering rules, the Department of Justice said.

According to the guilty plea he entered in Manhattan, Reed, 32, could encounter up to 5 many years in prison. Additionally, he reached an agreement with the US authorities to admit his wrongdoing and agreed to pay a fine of $10 million. However, the last ruling for BitMEX’s senior manager will be decided by a federal judge later on.

“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.

The news comes barely two weeks after BitMEX founders, Arthur Hayes and Benjamin Delo, pled guilty in a US federal court and agreed to each pay a $10 million fine.

The two co-founders of the controversial crypto derivatives exchange admitted to violating the Bank Secrecy Act’s anti-money-laundering provisions. As part of their plea deals, both men also face a prison term between six months and one year, but they are free to argue for a lesser sentence at their sentencing hearings.

BitMEX paid $100m fine to settle US charges

In 2020, FBI prosecutors indicted BitMEX’s owners and top executives: Arthur Hayes, Benjamin Delo, Samuel Reed, and Gregory Dwyer. The four men stood accused of violating the Bank Secrecy Act, evading money laundering regulations and operating an unlicensed business.

The indicted officials allowed BitMEX to operate as a platform “in the shadows of the financial markets,” the DoJ said.

In August, BitMEX paid $100 million in a settlement with the US authorities over allegations it broke CFTC and FinCEN rules by allowing Americans to trade on the platform.

US authorities had sued BitMEX with a long list of charges that are focused on whether the pioneering exchange acted as a broker without having regulatory approval. Moreover, the complaint charged the platform with acting as a counterparty to leveraged crypto trades, failing to implement KYC procedures and anti-money laundering procedures.

The CFTC estimates that BitMEX has facilitated ‘trillions of dollars’ in cryptocurrency derivatives transactions, received $11 billion in deposits and earned more than $1 billion in fees since beginning the operations in 2014.

Read this next

Digital Assets

Kraken acquires TradeStation’s cryptocurrency business

Kraken, the second-largest U.S.-based cryptocurrency exchange, has acquired the cryptocurrency arm of online brokerage TradeStation.

Retail FX

The Funded Trader is back? Traders report account closures

Prop trading firm The Funded Trader has updated its website with a few banners, nearly three weeks after it ceased all operations, with claims for a relaunch in the near future. However, there was no official statement on the relaunch on its website, Discord channel, or social media accounts yet.

Executive Moves

NAGA lures former Tickmill compliance exec Loukia Matsia

NAGA Group, a provider of brokerage services, cryptocurrency platform NAGAX and neo-banking app NAGA Pay, appointed Loukia Matsia as their new Head of Compliance and Anti-Money Laundering (AML).

blockdag

Explore 2024’s Top Cryptocurrencies: BlockDAG Leads With 30,000x ROI Potential, Among Surge Predictions For Bitcoin And Ethereum

Navigating the vast ocean of cryptocurrencies might feel overwhelming for many investors, whether seasoned or newbies.

Tech and Fundamental, Technical Analysis

EURUSD Technical Analysis Report 18 April, 2024

EURUSD currency pair can be expected to fall further toward the next support level 1.0600 (which reversed the price earlier this month).

Digital Assets

Binance ordered to remove Changpeng Zhao to get Dubai license

Binance, the world’s largest cryptocurrency exchange, has obtained a Virtual Asset Service Provider (VASP) license in Dubai.

Crypto Insider

Evolution and current state of global crypto adoption

Every four years, the crypto world gets hyped for the Bitcoin halving. Past halvings, like the one of May 2020, saw a massive increase in BTC transactions, which was driven by growing adoption and community involvement.

Digital Assets

Binance set to re-enter India with $2 million fine settlement

Binance, the world’s largest cryptocurrency exchange, is preparing to re-enter the Indian market after agreeing to pay a $2 million fine, according to a report by the Economic Times.

Chainwire

Over 1,000 Builders, Partners, Investors and Enthusiasts Gather at Inaugural Global Event to Celebrate Sui

Last week in Paris, over 1,000 blockchain enthusiasts from 65 countries gathered at the inaugural Sui Basecamp during Paris Blockchain Week. This milestone event showcased major announcements and drew a global community, highlighting Sui’s impactful strides in blockchain technology.

<