BitMEX hires chief compliance officer following U.S. money laundering charges

Besieged cryptocurrency derivatives exchange BitMEX has brought in a new chief compliance officer following U.S. money laundering charges.

Global Digital Finance’s Anti-Money Laundering Working Group advisory council chairman Malcolm Wright has taken over global compliance efforts of BitMEX in the wake of the civil and criminal charges, according to an Oct. 12 BitMEX announcement.

100x Group—the owner of BitMEX operator HDR Global Trading Limited—said Wright will report directly to Vivien Khoo, interim chief executive officer and chief operating officer. Wright commented:

“My vision is for 100x Group, through the BitMEX platform, to play a lead role in shaping how this industry collaborates with regulators to ensure everyone can safely avail of digital markets. I look forward to bringing my leadership and expertise to bear as the industry rapidly evolves alongside regulations.”

The move follows the recent indictment of BitMEX CEO Arthur Hayes and several other executives charged with violating anti-money-laundering (AML) laws by the U.S. Department of Justice. The company was also sued by that CFTC for the same thing.

The announcement said that “Malcolm’s appointment is a noteworthy milestone” as the firm moves forward in the enhancement of its compliance standards and sets a new user verification program. He explained that compliance is of the utmost importance for him:

“For me, compliance is non-negotiable, and a prerequisite for exchanges to be embraced by regulators and institutional investors alike.”

Wright reportedly has an extensive background in compliance and anti-money laundering and is an expert in the Financial Action Task Force’s (FATF) recommendations for virtual asset service providers (VASPs).

Wright brings vital insights to BitMEX

Notably, Wright currently chairs the Advisory Council and AML Working Group at Global Digital Finance, an organization defining the best practices for cryptocurrency exchanges and the virtual asset service providers, or VASPs. Wright’s expertise will certainly prove quite important for BitMEX given the recommendations released this summer by the FATF.

As Modern Consensus reported in late June, the new recommendation effectively forces countries to impose strict anti-money laundering requirements and user identification data collection requirements. This move effectively attempts to end the anonymity built into the ideals that resulted in Bitcoin—and consequently crypto—being created.

Interestingly, a more recent report by blockchain analytics firm Ciphertrace indicates that not much has changed since these recommendations were first released. According to the firm’s research, 56% of all crypto firms “have weak or porous know-your-customer processes,” meaning money launderers can use’ their services.