The Recorder: BitMEX Indictment Warns of New Department of Justice Approach on AML Program Failures

November 3, 2020

O’Melveny partners David Kirman and Laurel Loomis Rimon and counsel Nora Kahn and Braddock Stevenson co-authored this The Recorder article on the Department of Justice’s recent indictment of cryptocurrency platform BitMEX and how it points to a more aggressive DOJ strategy that may impact other financial institutions.

“[T]he DOJ has rarely, if ever, filed a standalone criminal indictment against individual executives for failing to maintain an adequate Anti-Money Laundering (AML) program (AML Program Charge),” the authors write. “Until now, the DOJ has typically brought AML Program Charges alongside other crimes, such as money laundering, fraud or other Bank Secrecy Act failures. These new standalone charges suggest the DOJ may focus directly on the scope and effectiveness of a financial institution’s AML program even in the absence of more serious criminal activity.”

“The DOJ’s strategy here is not without risk,” the authors note. “The AML Program Charge is a specific-intent crime, meaning the DOJ will have to prove ‘willful’ failure—that the defendant knew the charged conduct was unlawful. That’s a higher bar than for fraud and other crimes typically charged alongside AML Program Failure.”

The Recorder subscribers can read the full article here.