BitMEX co-founder sentenced to 30 months of probation
A New York judge sentenced BitMEX co-founder Benjamin Delo to 30 months of probation on Wednesday for dodging US banking laws.
The ruling concluded Delo’s role in the BitMEX legal trouble, which essentially absolved him of jail time but ended up costing him $10 million in regulatory fines. In delivering the sentence, Delo will return to his family and home in Hong Kong where he will serve his probation.
Patrick Smith, a defense lawyer for Delo, said BitMEX co-founder was involved in a “criminal compliance failure,” but had personally banned hundreds of US users.
Last month, co-founders of the BitMEX cryptocurrency exchange – Arthur Hayes, Benjamin Delo and Samuel Reed – agreed to pay a combined $30 million fine for violating the anti-money laundering Banking Secrecy Act.
BitMEX’s former head of operations Greg Dwyer has yet to resolve his own charges. Should no plea deals be forthcoming, he is scheduled to go to trial later this year. All four accused additionally faced charges of conspiring to violate the BSA, which also carries a potential maximum five-year prison sentence.
Earlier in February, Arthur Hayes and Benjamin Delo pled guilty in a US federal court and agreed to each pay a $10 million fine. The two co-founders of the controversial crypto derivatives exchange admitted to violating the Bank Secrecy Act’s anti-money-laundering provisions. As part of their plea deals, both men also face a prison term between six months and one year, but they were free to argue for a lesser sentence at their sentencing hearings.
The third founder of crypto exchange BitMEX, Samuel Reed, also pleaded guilty to violating anti-money-laundering rules. Additionally, he reached an agreement with the US authorities to admit his wrongdoing and agreed to pay a fine of $10 million. However, the last ruling for BitMEX’s senior manager will be decided by a federal judge later on.
In 2020, FBI prosecutors indicted BitMEX’s owners and top executives who stood accused of violating the Bank Secrecy Act, evading money laundering regulations and operating an unlicensed business.
The orders stem from a CFTC complaint filed in October 2020 which charged BitMEX and its founders with conducting significant aspects of their business from the US.
US authorities sued BitMEX with a long list of charges that are focused on whether the exchange acted as a broker without having regulatory approval. Moreover, the complaint charged the platform with acting as a counterparty to leveraged crypto trades, failing to implement KYC procedures and anti-money laundering procedures.