On Thursday, the US public prosecutors had filed criminal charges against four co-founders and executives of BitMex, one of the world’s largest digital currency derivatives exchanges, alleging the BitMex executives had failed to prevent a number of potential money laundering events that involved people in the United States as well.
Notably, BitMex has been registered in the small East African island country of Seychelles where digital currency regulations were less strident, while Hayes was once quoted as bragging that it could cost less than the price of “a coconut in the United States” to bribe the Seychelles authorities, a local newspaper report had revealed on Thursday.
BitMex executives charged with money laundering
In point of fact, the US Department of Justice had sued all three BitMex co-founders such as Arthur Hayes, Benjamin Delo and Samuel Reed who together had launched the crypto exchange platform back in the 2014, alongside the company’s first employee Gregory Dwyer who later become the head of business development in BitMex.
All of them were accused of violating the US Federal Bank Secrecy Act and plotting to breach that law. In tandem, Hayes, 34, hailing from Buffalo, New York, has been the acting Chief Executive of BitMex, while Reed has been the company CTO (Chief Technology Officer).
Apart from the criminal lawsuit filed by the US Department of Justice, Commodity Futures Trading Commission in parallel had filed a separate lawsuit in order to put the kibosh on BitMex’s US Commodity derivatives business, while BitMex had been acting as a seller and buyer of short-positions in Bitcoin Mercantile Exchange on behalf of its anonymous clients.
Nonetheless, defending BitMex’s stance as a transparent broker of wide-ranging cryptocurrencies, a spokesman for BitMex-parent HDR Global Trading Ltd. was quoted saying in a statement late on the day, “We strongly disagree with the U.S.
government’s heavy-handed decision to bring these charges, and intend to defend the allegations vigorously”.