Following indictments, BitMEX upgrades anti-money laundering compliance

Cryptocurrency exchange BitMEX has partnered with regulatory technology firm Eventus Systems to strengthen its anti-money laundering (AML) compliance.

The move follows last month’s indictment of now-former BitMEX CEO Arthur Hayes, along with co-founders Benjamin Delo and Samuel Reed (the only one arrested), on charges of violating the Bank Secrecy Act and conspiring to violate the Bank Secrecy Act by failing to put sufficient anti-money-laundering safeguards in place. Head of business development Gregory Dwyer was also indicted.

In a Nov. 12 announcement, BitMEX said its collaboration with Eventus Systems aims to enhance its trade surveillance and AML capabilities, following up on its promise to quickly improve regulatory compliance:

“Through integrating the Eventus Validus technology into our existing trade surveillance and AML processes, we will be able to more efficiently screen out bad actors and increase proactive monitoring for unauthorised trading activity on the BitMEX platform.”

Eventus Systems CEO Travis Schwab explained that the firm invested in adding support for digital asset market operators to its services. He also recognized that “BitMEX has taken a variety of important steps over the past year to enhance its commitment to market integrity.”

Many expect more such measures to be taken by regulators around the world. A report released in early October by blockchain analytics firm CipherTrace sheds some light on why. The paper said:

“56% of [virtual asset service providers] VASPs globally have weak or porous KYC processes, meaning money launderers can use these VASPs to deposit or withdrawal their ill-gotten funds with very minimal to no KYC.”

Malcolm Wright, the compliance officer at BitMEX owner 100x Group, explained that Eventus Systems services are important for the firm’s plans to enhance its compliance capabilities, adding that it has “a vision of leading the industry on best practice crypto-asset compliance.” He explained:

“Eventus has extensive expertise and experience not only with digital asset exchanges but also within the traditional financial sector. Choosing Eventus is part of our ongoing commitment to achieve this vision as we execute signature initiatives like our User Verification Programme.”

As Modern Consensus reported in mid-October, 100x Group hired Wright shortly after the money laundering charges, hoping to leverage his expertise on the Financial Action Task Force’s recommendations for virtual asset service providers.