BitMEX CTO and co-founder Samuel Reed has been released on $5 million bail, according to newly released court documents.
Reed, along with three other top executives of the BitMEX cryptocurrency derivatives exchange, have been indicted by the U.S. Department of Justice for failing to implement anti-money-laundering controls.
Reed was the only one arrested. Warrants have been issued for CEO and co-founder Arthur Hayes, co-founder Ben Delo, and head of business development Gregory Dwyer. All three co-founders stepped down from their positions at BitMEX on Oct. 8. Dwyer is on a leave of absence.
Under the terms of his bail, Reed had to put up $500,000 in cash. In addition, both he and his wife had to surrender their passports. He can only travel in New York, Massachusetts, and Wisconsin, with parole office approval.
He is also banned from any contact with Hayes, Delo, or Dwyer without lawyers present.
The charges, violating the Bank Secrecy Act and conspiring to violate the Bank Secrecy Act, each carry a maximum penalty of five years in prison.
Civil charges as well
In addition to the criminal charges, Hayes, Delo and Reed were named in a civil suit filed by the Commodity Futures Trading Commission (CFTC). BitMEX and its various parent companies are also named.
It charges that with BitMEX is “operating an unregistered trading platform and violating multiple CFTC regulations, including failing to implement required anti-money laundering procedures.”
The agency is seeking “disgorgement of ill-gotten gains, civil monetary penalties, [and] restitution for the benefit of customers.”
Attorney Stephen Palley tweeted that the company could be facing “potentially billions of dollars” in civil penalties.