District Court Sentences Crypto Exchange for Flouting BSA/AML Requirements

A cryptocurrency exchange was sentenced to two years probation and a fine of $100 million for violating the Bank Secrecy Act "by willfully failing to establish, implement, and maintain an adequate anti-money laundering ("AML") and know-your-customer ("KYC") program."

According to the Court-filed Information in the US District Court for the Southern District of New York, the exchange, which was formally incorporated in the Seychelles, continued to operate in the US as an online trading platform and to service US customers, thereby, making it subject to AML and KYC requirements. The government claimed that the firm allowed customers to register and trade without providing identifying information beyond an email address. 

According to the US Attorney's Office, "policies nominally in place to prevent such trading were toothless or easily overridden to serve [the exchange's] bottom line goal of obtaining revenue through the US market without regard to US criminal laws." The prosecutor said that "as part of [the exchange's] willful evasion of US AML laws, the company lied to a bank about the purpose and nature of a subsidiary to allow [it] to pump millions of dollars through the US financial system."

This criminal action follows a CFTC and FinCEN settlement against the firm (see previous coverage) as well as a CFTC settlement against the firm's founders (see previous coverage).