“From at least September 2015, and continuing at least through the time of the Indictment in September 2020, HAYES and DELO willfully caused BitMEX to fail to establish and maintain an AML program, including a program for verifying the identify of BitMEX’s customers (or a “know your customer” or “KYC” program). As a result of its willful failure to implement AML and KYC programs, BitMEX was in effect a money laundering platform. For example, in May 2018, HAYES was notified of allegations that BitMEX was being used to launder the proceeds of a cryptocurrency hack. Neither HAYES, DELO, nor their company filed a suspicious activity report thereafter (indeed, BitMEX filed no suspicious activity reports at all between 2014 and September 2020), nor did they implement an AML or KYC program in response. Unsurprisingly, BitMEX was also a vehicle for sanctions violations: HAYES and DELO both communicated directly with BitMEX customers who self-identified as being based in Iran, an OFAC-sanctioned jurisdiction, but did nothing to implement an AML or KYC program after doing so.
HAYES and DELO failed to institute AML or KYC programs at BitMEX despite closely following U.S. regulatory developments that made clear their legal obligation to do so if BitMEX operated in the United States, which it did. Despite repeatedly stating that BitMEX did not serve U.S. customers, including to members of the press and others outside of BitMEX, HAYES and DELO both knew that BitMEX’s purported withdrawal from the U.S. market in or about September 2015 was a sham, and that purported “controls” BitMEX put in place to prevent U.S. trading were an ineffective facade that did not, in fact, prevent users from accessing or trading on BitMEX from the United States. HAYES and DELO not only understood that U.S. customers continued to trade on BitMEX, but derived substantial profits from BitMEX as a result of U.S.-based trading. HAYES and DELO actively sought out U.S. customers by using U.S.-based cryptocurrency “influencers” to market to new customers through BitMEX’s so-called “Affiliate Program.” HAYES also conducted U.S. television appearances and marketing stunts that promoted BitMEX’s products in the United States. DELO allowed a customer to continue to access a BitMEX trading account despite this customer explicitly being “US based,” merely because that customer was “famous in Bitcoin.” DELO falsely changed internal tracking information to reflect that customer’s country of residence as being other than the United States, despite knowing that to be false.”
This would also be a criminal offence in the UK.
www.channel4.com
England
www.theguardian.com
globallawexperts.com
