Bitcoin derivatives exchange BitMEX has hired an experienced anti-money laundering specialist shortly after several indictments from the United States.
Compliance officer Malcolm Wright has to make sure that the big angry America doesn’t get even angrier.
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BitMEX’s customer base seems to have little confidence anymore in a successful outcome and the platform itself. On 3 October, $420 million worth of Bitcoin Pro was already withdrawn from the stock market.
Earlier this month, BitMEX and several parties involved were sued by the U.S. Department of Justice and the Commodity Futures Trading Commission (CFTC).
According to the U.S. government, BitMEX does not have the proper licenses to offer their financial products to Americans. Yet tens of thousands of customers from that part of the world are or have been active on the platform.
This is partly due to the poor Know-Your-Customer (KYC) procedures of the trading platform. You can (or could) relatively easily get started at BitMEX without giving up much of yourself.
That is good for the privacy of the customer, but it is something that governments do not agree with. It plays into the hands of illegal money flows.
In short: BitMEX has to comply with the American rules and hires reinforcements to do so.
Wright joins 100X Group, the operator of BitMEX. Co-founders Arthur Hayes, Samuel Reed and Ben Delo are among others involved in the lawsuits. Partly because of this, they are currently no longer active as directors within the organization of BitMEX.
Hayes announced to take a step back. Chief technology officer Reed was previously arrested in Spain. In the meantime he is back on a free footing, the deposit of $5 million (!) has been paid.
BitMEX calls this news an important milestone towards implementing their KYC procedures. However, the question is: isn’t this too late? The case has yet to get off to a good start and the first consequences are already visible.