The money laundering trial for the former executives of U.S. cryptocurrency exchange BitMEX has been scheduled for March 28, 2022.
On May 11, New York District Judge John Koeltl set the trial date for former BitMEX executives CEO Arthur Hayes, co-founder Benjamin Delo, and chief technology officer Samuel Reed.
The trio are accused of violating the Bank Secrecy Act and anti-money laundering laws. Additionally, BitMEX’s head of business development, Gregory Dwyer, is also facing charges but has yet to appear in the case.
The U.S. Department of Justice originally filed the criminal charges against the four executives on October 1, 2020, for illegally operating a derivatives exchange. Hayes, Delo, and Reed founded BitMEX in 2014 but failed to register with the U.S. Commodity Futures Trading Commission which has also filed a civil enforcement action against the company.
DoJ prosecutors have accused BitMEX executives of failing to implement AML procedures while doing business with U.S.-based traders, despite the company being based in the Seychelles.
According to the indictment, Hayes allegedly said in July 2019 that the Seychelles was a friendlier jurisdiction since it cost less to bribe authorities there than it would in the U.S. FBI Assistant Director William Sweeney claimed to the press that Hayes bragged about bribing regulators in that jurisdiction costing just “a coconut.”
According to John Jefferies, chief financial analyst at blockchain intelligence firm CipherTrace, BitMEX had been under CFTC investigation since early 2019 for allowing Americans to trade on the platform. Speaking to Cointelegraph, he added that they were given time to improve their Customer Identification Program to effectively exclude U.S. clients.
Any defense motions are due to be filed in June while other potential pretrial motions are scheduled to be lodged by September, a Law360 report noted. If convicted, the executives could face a maximum of five years in prison and a $250,000 fine.
In mid-January, BitMEX announced that it was working with blockchain analytics firm Chainalysis with the aim of identifying, investigating, and preventing illicit transactions.