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President Donald Trump has granted pardons to three co-founders of the BitMEX cryptocurrency exchange—Arthur Hayes, Benjamin Delo, and Samuel Reed—along with Gregory Dwyer, a former high-ranking employee.
The decision follows their guilty pleas for violating the Bank Secrecy Act due to the exchange’s failure to maintain adequate anti-money laundering (AML) and know-your-customer (KYC) programs.
Pardons Granted To BitMEX Leaders
The co-founders were sentenced to varying lengths of probation and collectively ordered to pay civil fines amounting to $30 million as a result of a lawsuit filed by the Commodity Futures Trading Commission (CFTC).
Dwyer, who received a 12-month probation sentence, was fined $150,000. Prosecutors had alleged that the executives ran BitMEX as a “money laundering platform” and accused them of misrepresenting the exchange’s withdrawal from the US market.
The pardons were issued on Thursday, more than three months after BitMEX was hit with a hefty $100 million fine for the same violations under the Bank Secrecy Act. In a tweet following the announcement, Hayes expressed gratitude, stating, “Thank you POTUS,” referring to Trump as the President of the United States.
Delo also commented on the pardons, asserting that the US Department of Justice had wrongfully targeted BitMEX and its leadership. “This full and unconditional pardon by President Trump is a vindication of the position we have always held,” Delo stated.
Delo emphasized that their prosecution under what he deemed an “obscure, antiquated law” was unjust, claiming that BitMEX was unfairly made an example of for political reasons.
Legal Challenges
Founded in 2014, BitMEX quickly became one of the most prominent cryptocurrency exchanges, but its executives faced scrutiny for allegedly ignoring regulations designed to prevent money laundering.
Prosecutors indicated that the executives were aware of the necessity to implement AML measures because the exchange served US customers, yet they allegedly chose to bypass these requirements, allowing users to access the platform with minimal verification.
Delo, who served as the chief operating officer and chief strategy officer, received a 30-month probation sentence after his guilty plea in US District Court in Manhattan.
Hayes, on the other hand, was sentenced to six months of home confinement followed by two years of probation, while Reed, the former chief technology officer, was sentenced to 18 months of probation.
In a related development, Trevor Milton, the founder and former CEO of electric truck manufacturer Nikola, also received a pardon from Trump for his conviction on securities fraud charges, for which he was sentenced to four years in prison but remained free on appeal.
Featured image from DALL-E, chart from TradingView.com
