Financial institutions have an obligation under law to ensure that the transactions conducted through their platforms are legitimate. If suspicious activity arises, these institutions are required to report the activity to the Financial Crimes Enforcement Network. This requirement falls under the Bank Secrecy Act, and if individuals or entities are suspected of violating that act, serious penalties could result.
Minnesota readers may be interested in a recent agreement involving BitMEX, a cryptocurrency exchange platform, and federal banking agencies. According to reports, BitMEX came under investigation for the following suspected violations:
- Not performing due diligence when it came to allowing customers to use the platform
- Not verifying customer identities
- Not maintaining appropriate safeguards against money laundering
- Not reporting suspicious activity to FinCEN
- Conducting business with unregistered money services
The agreement resulted in BitMEX indicating that the company would pay up to $100 million for alleged illegal operation of a cryptocurrency platform. It was also noted that the former CEO and other executives could still face charges relating to purported violations regarding the Bank Secrecy Act. The former CEO was reported to have been released from custody earlier this year after meeting a $10 million bail.
Issues regarding bank-related violations and the Bank Secrecy Act can certainly come with hefty consequences, as this case shows. If financial institutions and entities find themselves facing accusations of such violations, it would likely be in their interests to gain reliable information on their legal options. With the right information and assistance, they may be able to see themselves through such predicaments as well as possible.