[jluxenberg]

I think the indictment is straightforward: BitMEX provided banking services to US customers without implementing Know Your Customer and other required anti-money-laundering safeguards.

Being a "fintech" product doesn't exempt an operator from the law: KYC is the law on the US.

I'm surprised there haven't been more indictments, since I'm sure other exchanges have operated fast+loose w.r.t. AML and KYC

[jstanley]

I don't know what you think BitMEX is, but I'm pretty sure they never offered banking services.

[jkhdigital]

The law covers commodity futures trading services as well, which is what the indictment cites as justification for holding them to the terms of the Banking Secrecy Act.

The laws around KYC and AML are written for the traditional banking system, and are a bit nonsensical when applied to crypto. BitMEX deals only in Bitcoin, so it begs the question of how one could “launder” anything through it.

[josh2600]

I think this is where it gets hairy: bitmex was 100% synthetic and denominated in btc. There’s no part of what they did that related to usd except that the trades were denominated in usd pricing, but all monetary flows in and out of the exchange were btc.

It may be the case they the US has jurisdiction over US customers anywhere in the world even if they aren’t transacting in US dollars. I guess we’re going to find out?

To be extra clear, it would be hard to call what bitmex sold a commodity futures contract because there was never a way to take delivery of the asset nor intention to do so. Their contracts were perpetual futures, which is to say: fictitious markers of value that can only ever be btc at the end of the day. This is why so many people referred to it as Arthur’s digital casino.

Edit: lastly, IANAL, it could be possible that the bsa includes Bitmex perpetual futures and this is open and shut. The interesting thing to me is the btc component but maybe that doesn’t matter at all?

[smabie]

bitmex allowed people to trade btc settled quanto derivatives contracts. That's it.