(Bloomberg) -- Founders of the BitMEX cryptocurrency exchange were indicted by federal prosecutors in New York for failing to maintain an adequate anti-money laundering program at the company.
BitMEX founders Arthur Hayes, Benjamin Delo and Samuel Reed were indicted on charges of violating the Bank Secrecy Act and conspiring to violate the Bank Secrecy Act, both of which carry a maximum prison term of five years.
Also charged was Gregory Dwyer, the exchange’s first employee and later its head of business development. Reed was arrested in Massachusetts this morning, while the rest remain at large, prosecutors said.
BitMEX’s representatives didn’t immediately respond to requests for comment on the charges.
Bitcoin erased gains following the news.
Bloomberg reported in July of 2019 that the U.S. Commodity Futures Trading Commission was investigating BitMEX, with a focus on whether the exchange broke rules by allowing Americans to trade on the platform, which isn’t registered with the agency.
(Updates with details starting in second paragraph.)
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