The US Government is pushing for a Court order directing HDR Global Trading Limited, a/k/a “BitMEX” to pay a $417 million fine.
This is apparent from a sentencing submission dated December 10, 2024.
The Government says that BitMEX earned at least $155 million in revenue attributable to U.S. sources during the relevant period of September 1, 2015, through September 30, 2020 (the “Relevant Period”).
Using this U.S. revenue as the Company’s gain from the offense, and in light of the remaining Guidelines calculations and Section 3553(a) factors, the Government posits that a total fine of $417 million is warranted in this case. This fine is at the middle of the Government’s calculation of the Guidelines range of $293 to $541 million (the “Guidelines Range”).
Notably, even if the Court were to resolve certain Guidelines disputes in the Company’s favor (specifically, as to application of a 200-employee enhancement and acceptance of responsibility), the Government’s proposed fine of $417 million would still be a Guidelines fine, at the top of the defense-favorable Guidelines range.
According to the allegations in the Information and other filings and statements made in court:
Arthur Hayes, Benjamin Delo, and Samuel Reed founded BITMEX in or about 2014, and Gregory Dwyer became BITMEX’s first employee in 2015 and later its Head of Business Development. BITMEX, which has long serviced and solicited business from U.S. traders and also operated through U.S. offices, was required to register with the Commodity Futures Trading Commission (“CFTC”) and to establish and maintain an adequate AML program.
The company and its executives knew that because BITMEX operated in the United States, including by serving U.S. customers, it was required to implement an AML program that included a “know your customer” (“KYC”) component but chose to flaunt those requirements, requiring only that customers provide an email address to use BITMEX’s services.
Indeed, senior executives each knew that customers residing in the United States continued to access BITMEX’s trading platform through at least in or about 2018 and that BITMEX policies nominally in place to prevent such trading were toothless or easily overridden to serve BITMEX’s bottom line goal of obtaining revenue through the U.S. market without regard to U.S. criminal laws.
Corporate executives took affirmative steps purportedly designed to exempt BITMEX from the application of U.S. laws like AML and KYC requirements, despite knowing of BITMEX’s obligation to implement such programs by operating in the United States.
As part of BITMEX’s willful evasion of U.S. AML laws, the company lied to a bank about the purpose and nature of a subsidiary to allow the company to pump millions of dollars through the U.S. financial system.
The sentencing of HDR Global Trading Limited, a/k/a “BitMEX” is presently scheduled for January 15, 2024.
