Third co-founder of crypto exchange BitMEX pleads guilty to US bank security act violations

One of the three co-founders of cryptocurrency derivatives exchange BitMEX, Samuel Reed, has pled guilty to violating the Bank Secrecy Act (BSA), by failing to establish, implement and maintain an anti-money laundering program at the firm.

Reed also agreed to pay a criminal fine of $10 million representing pecuniary gain derived from the offense under the terms of his plea agreement.

US Attorney Damian Williams said:

Samuel Reed has now joined his co-founders, Arthur Hayes and Benjamin Delo, in admitting that they caused BitMEX to commit criminal violations of the anti-money laundering laws that govern financial institutions operating in the United States.  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 US law.”

Reed entered his guilty plea yesterday and will be sentenced by the US District Court. The other two co-founders of BitMEX, Arthur Hayes and Benjamin Delo, plead guilty for the same offense in February 2022.

As part of their plea agreements, both Hayes and Delo each agreed to pay $10 million criminal fine.


Established in 2014, BitMEX quickly became popular for offering 100x leverage on crypto derivative instruments. However, the exchange operated in the US market without the proper approval from the CFTC. The US regulator charged the company and BitMEX was ordered to pay $100 million for illegal operation of a cryptocurrency trading platform.

According to the prosecutors, the co-founders of the exchange intentionally failed to establish AML and KYC programs. As a result, “BitMEX was in effect a money laundering platform”.

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