BitMEX exchange faces lawsuit over money-laundering allegations

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Posted on: May 19, 2020 5:30 pm EDT

The crypto exchange is being accused of racketeering and money laundering

The parent company of the Hong Kong-operated Bitcoin Mercantile Exchange (BitMEX), HDR Global Trading Ltd, is facing a lawsuit that was filed on May 16, 2020. BitMEX, one of the leading crypto exchanges in the market with billions of dollars’ worth in daily trading volume, is accused of engaging in illegal activities like money laundering. Also included in this 106-page lawsuit is ABS Global Trading and its co-founders, Arthur Hayes, Ben Delo and Samuel Reed.

The plaintiff is BMA LLC, and the filing was made in the US District Court for the Northern District of California. According to the plaintiff, BitMEX was designed to purposely take part in illegal financial activities that include market manipulation, money laundering and racketeering. The lawsuit adds that the defendants have generated “billions of dollars in illicit profits” because they have been running unlicensed or unregulated money-transferring businesses.

“According to Defendants’ own data, Defendants’ unlicensed money transmitting business admittedly processed, on average, $3 billion of illegal and unlicensed money transfers each day, all in violation of United States federal statute…, which is the record volume for such unlawful activity in the entire history of the monetary regulation in the United States,” claims the lawsuit.

Even though HDR Global is incorporated and registered in Seychelles, it has business offices in San Francisco. “The San Francisco office of Defendant HDR is the largest of all three by both the employee headcount and technical staff headcount,” according to the plaintiff. BMA LLC assures that BitMEX has been operating underground in the US through the use of its wholly-owned subsidiary, ABS. “Defendants Hayes, Delo and Reed have created Defendant ABS as a false ‘shell’ company as part of a broader United States federal and state law, regulation and tax dodge designed to tell regulators and tax authorities that BitMEX has no California or United States operations or investors,” asserts the suit.