BitMEX, a prominent crypto exchange and derivatives trading platform, confessed to breaching the Bank Secrecy Act on Wednesday. This admission, disclosed by the U.S. Attorney for the Southern District of New York, reveals that BitMEX intentionally neglected to establish, implement, and maintain a sufficient anti-money laundering (AML) program.

“As acknowledged by BitMEX’s founders and a long-standing employee in federal court in 2022, the company, one of the leading cryptocurrency derivatives platforms globally from 2015 to 2020, operated within the United States without any meaningful AML program, as mandated by federal law,” Damian Williams, U.S. Attorney for the Southern District of New York, stated.

BitMEX has encountered substantial legal issues in the United States since at least 2022.

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In late 2022, prosecutors urged a court to impose a 12-month probation sentence on Greg Dwyer, the company’s former head of business development, for violating the U.S. Bank Secrecy Act. Earlier that year, Arthur Hayes, one of BitMEX’s founders, received a six-month home detention sentence after admitting guilt for the same offense.

“BitMEX became a conduit for large-scale money laundering and sanctions evasion schemes, jeopardizing the integrity of the financial system,” Williams remarked in Wednesday’s statement. “Today’s guilty plea underscores the imperative for cryptocurrency companies to comply with U.S. law if they wish to benefit from the U.S. market.”

Established in 2014, BitMEX “catered to and solicited business from U.S. traders and operated through U.S. offices. Consequently, it was obligated to register with the Commodity Futures Trading Commission and to develop and sustain an adequate AML program,” the statement highlighted.

BitMEX admitted to one count of “violating the Bank Secrecy Act, which carries a maximum sentence of five years in prison and a fine.”

BitMEX is neither the first nor the largest exchange to face penalties for non-compliance with U.S. regulations. Changpeng Zhao, the former head of Binance, the world’s largest cryptocurrency exchange, recently reported to a low-security facility in California to begin a four-month federal prison term. Zhao pled guilty in late 2023 to failing to implement appropriate AML protocols at Binance.