US authorities on Thursday made criminal charges against the owners of Bitmex, one of the world’s largest cryptocurrency trading exchanges, accusing them of allowing the Hong Kong-based company to legalize funds and engage in other illegal transactions.
BitMEX is far from the first cryptocurrency company suspected of facilitating criminal activity. But it is the largest and most established exchange to face criminal charges.
Federal prosecutors in Manhattan inspired Bitmex, Arthur Hayes, and the chief executive of three co-owners: Benjamin Dallow, Samuel Reid, and Gregory Dwyer. Authorities said Mr. Reid was arrested on Thursday in Massachusetts, while the other three people remained at large.
Prosecutors said Bitquemax had taken some steps to limit customers, even stating that the exchange was being used by hackers to loot stolen money, and by sanctions such as Iran Under was being done by people in countries.
The indictment released on Thursday stated, “BitMEX has made itself available as a vehicle for money laundering and violation of sanctions.”
Bitmex recently handled more than $ 1.5 billion in trades each day, making it one of the five largest exchanges on most days. Bitmax and Mr. Hayes are known to push the limits in the uncontrolled cryptocurrency industry.
After its founding in 2014, BitMEX became popular by allowing traders to buy and sell contracts tied to the value of bitcoin, known as derivatives, or futures – with some restrictions and rules that were in other exchanges. permitted to Investors to take huge loans and conduct risky business.
The relaxed approach also made it possible for people around the world to easily withdraw money from bitcoins without checking their basic identity and thereby prevent money laundering. In August, Bitmax put out some of those verification checks.
Mr. Hayes is from Buffalo, and previously worked as a businessman at Deutsche Bank and City after graduating from the University of Pennsylvania. He incorporated Bitmax into the Seychelles, even though it had offices in Hong Kong and New York.
Mr Hess chose Seychelles “because it costs less to pay bribes to Seychellois officials – just ‘a coconut’ – for bribe regulators in the United States and elsewhere,” according to the indictment.
A spokeswoman for HDM Global Trading Ltd., one of the corporate entities governing Bitmax, said, “We disagree with the US government’s heavy-handed decision to bring these allegations, and intend to vigorously defend the allegations.” . “
BitMEX has been reported under investigation by US authorities since last year. On Thursday, US cryptocurrency experts said they were not surprised that the exchange would attract scrutiny given its freewheeling attitude.
Coin Center executive director, Jerry Brito, a research and lobbying group, said, “There is a vast majority of firms serving in the US, so it is not surprising that the government will now replace those who follow law Deny it. ” Washington