Final BitMEX Co-Founder Pleads Guilty to US Violations

Samuel Reed will pay a $10 million fine for violating anti-money laundering rules.

AccessTimeIconMar 9, 2022 at 5:14 p.m. UTC
Updated May 11, 2023 at 4:43 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

The third founder of cryptocurrency exchange BitMEX pled guilty in a federal court on Wednesday to violating U.S. anti-money laundering (AML) rules, according to the U.S. Department of Justice.

Samuel Reed pled guilty in the U.S. District Court in the Southern District of New York to violating the Bank Secrecy Act (BSA) by “willfully failing to establish, implement and maintain” an anti-money laundering program at BitMEX.

Under the plea agreement, Reed will pay a $10 million fine. The charge also carries a maximum sentence of five years in prison, according to the Department of Justice. Reed’s sentence will be decided by a federal judge.

Reed is the third and final BitMEX co-founder to plead guilty to the same offense, following the pleas of Arthur Hayes and Benjamin Delo in February.

“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 DOJ and the Commodity Futures Trading Commission (CFTC) each brought federal charges against BitMEX and its founders in October 2020, with the CFTC settling its case last year.

BitMEX was accused of setting up offshore operations to evade U.S. AML regulations while still allowing U.S. customers to transact on the platform.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Brandy Betz

Brandy covered crypto-related venture capital deals for CoinDesk.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.


Read more about