Former President Donald Trump has granted pardons to the three co-founders of BitMEX, a cryptocurrency exchange that previously faced legal trouble for violating financial regulations. Arthur Hayes, Benjamin Delo, and Samuel Reed had pleaded guilty in 2022 to violating the Bank Secrecy Act by failing to implement proper anti-money laundering protocols. Trump signed the pardons on Thursday without making a public announcement, according to a source familiar with the decision.
BitMEX had been fined $100 million in January for its failure to establish adequate anti-money laundering and know-your-customer (KYC) programs. In response to the pardon, Delo issued a statement expressing gratitude to Trump, claiming that the Justice Department had wrongfully targeted BitMEX and its founders. He argued that their prosecution was politically motivated and based on an outdated law, stating that BitMEX was unfairly made an example of due to its success. Delo described the pardon as a correction of a legal wrong, allowing him to move forward without the weight of an unjust conviction.
Federal prosecutors had maintained that cryptocurrency companies like BitMEX play a crucial role in ensuring that financial markets remain fair and secure. Then-U.S. Attorney Damian Williams criticized the founders for failing to implement even the most basic anti-money laundering measures, describing BitMEX as operating “in the shadows of the financial markets.” Court records indicated that from 2015 until their indictment in 2020, BitMEX functioned as a platform that facilitated money laundering. The company openly advertised that it required no real-name verification or advanced KYC procedures, and an internal email from Reed in 2015 highlighted this as an advantage. By 2018, Reed was alerted to allegations that BitMEX was being used to launder money from a cryptocurrency hack, yet neither he nor the company reported any suspicious activity to the Treasury Department.
Hayes, Delo, and Reed each pleaded guilty to violating the Bank Secrecy Act, agreeing to pay fines of $10 million. Their sentences varied: Hayes was sentenced to two years of probation with six months of home detention, Delo received 30 months of probation, and Reed was sentenced to 18 months of probation. Prosecutors had argued for harsher penalties, stating that the crimes warranted stricter sentencing under federal guidelines.
While Trump’s decision to pardon the BitMEX founders has sparked controversy, Delo and his co-founders maintain that they were unfairly prosecuted. With their convictions now overturned, the case raises further questions about regulatory enforcement in the rapidly evolving cryptocurrency sector.
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