Cryptocurrency Companies to Remain in U.S. Law Enforcement Crosshairs

Fenika Bench

Cryptocurrency companies can expect to remain a focus for U.S. financial-crime enforcers, officials with the U.S. Justice Department and Commodity Futures Trading Commission said.

The landmark prosecution of cryptocurrency derivatives platform BitMEX, which saw the Justice Department and CFTC bring actions against the company and its founders, is likely the first of many such actions,

Gretchen Lowe,

acting director of the CFTC’s enforcement division, said Wednesday.

“I think you’re going to see more cases like that,” said Ms. Lowe, speaking virtually at a panel discussion at the Practising Law Institute in New York. “That case is significant. We addressed the entity, and we addressed the controlling persons of the entity.”

BitMEX co-founder

Arthur Hayes

was sentenced last week to six months house arrest for failing to establish an anti-money-laundering program even though BitMEX served U.S. customers, a lapse that violated U.S. law governing financial institutions. Mr. Hayes also paid $10 million to the CFTC in a related settlement.

Arthur Hayes, co-founder of BitMEX


Michael Nagle/Bloomberg News

Prosecutors are “institutionally committed” to “very robust” enforcement of the Bank Secrecy Act, said

Daniel Gitner,

the chief of the criminal division in the Manhattan U.S. attorney’s office. Mr. Hayes was charged under the BSA.

“At least one premise of crypto is anonymity and invisibility,” Mr. Gitner said. “And of course, a premise of crime is anonymity and invisibility. And so those two things sometimes tend to go hand in hand.”

Cryptocurrency companies have an “unusually important” role to play in preventing money laundering on their platforms, he said, adding that the government won’t accept token compliance efforts in anti-money-laundering and know-your-customer programs.

“No winks and nods, no off-the-shelf programs that really aren’t meant to get to the core of the business,” Mr. Gitner said. “Actually focus on what matters.”

Write to Richard Vanderford at [email protected]

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