Troubled BitMEX exchange executive Samuel Reed released on a $5 million bond paid to the district of Massachusetts court following his arrest on October 1. According to a document first shared by The Block, the court approved the unsecured bond payment on October 3rd on condition that Samuel Reed will show up to court and accept to serve a sentence if convicted.
The U.S Department of Justice (DoJ) charged BitMEX executives on October 1 due to allowing unlicensed trading to Americans and violating the anti-money laundering and know your customer rules and measures set in place. Founders of BitMEX, Arthur Hayes, Samuel Reed, and Benjamin Delo have all been charged with breaking the Banking Secrecy Act, carrying a maximum jail term of five years. Reed was arrested in Massachusetts earlier this month charged with
“willfully failing to establish, implement, and maintain an adequate anti-money laundering (‘AML’) program at the Bitcoin Mercantile Exchange or ‘BitMEX.’”
This was the second arrest amongst the company executives with the head of business development, Gregory Dwyer, also charged and arrested.
Reed’s $5 million bond payment will be secured with a $500,000 cash payment. Reed and his wife’s passports have also been confiscated by the authorities to mitigate flight risk.
The U.S Commodities and Futures Trading Commission (CTFC) has also filed a civil lawsuit against the three founders in the Southern District Court in New York on the AML/KYC breaches on the exchange.
In an attempt to please customers and halt the hammering exodus from the exchange, HDR Global, wholly owner of the BitMEX exchange, announced the three executives charged would step back from their respective roles. Arthur Hayes and Samuel Reed have stepped back from their respective roles as CEO and CTO, respectively.
Despite the charges, 100x Group chairman David Wong said, “it will be business as usual” for the exchange aiming to provide the best features and “maintain the highest standards of corporate governance.”