US President Donald Trump has stirred controversy by pardoning all three founders of the BitMEX cryptocurrency exchange, despite their previous guilty pleas to federal criminal charges related to money laundering. The co-founders, former CEO Arthur Hayes, Benjamin Delo, and Samuel Reed, were pardoned by Trump on Thursday, according to a report by CNBC.
The trio had been accused by prosecutors of running BitMEX as a “money laundering platform” and falsely claiming to withdraw from the U.S. market. They were sentenced to probation and ordered to pay civil fines totaling $30 million. BitMEX, founded in 2014 by Hayes, Delo, and Reed, allowed users to trade without real-name verification until September 2020, when it started requiring registration and transactions in cryptocurrencies.
Despite being required to implement an anti-money laundering (AML) program with a know-your-customer (KYC) component, BitMEX chose to forgo these requirements and only asked for customers’ email addresses. This decision led to former CEO Alexander Hoeptner suing the exchange. Just a few months ago, BitMEX was fined $100 million for violating the Bank Secrecy Act by failing to establish proper AML and KYC programs.
Delo, the former COO and chief strategy officer, received 30 months of probation, while Hayes was sentenced to six months of home confinement followed by two years of probation. Reed, the former chief technology officer, was sentenced to 18 months of probation. Despite their guilty pleas and sentences, BitMex Research posted a congratulatory message to the founders on social media.
The Department of Justice (DOJ) has not yet commented on Trump’s pardons, which have raised questions about the implications for the fight against money laundering and financial crimes. Critics argue that pardoning individuals involved in such activities undermines the rule of law and sends the wrong message about accountability in the financial sector.
The decision to pardon the BitMEX founders comes at a time when the cryptocurrency industry is facing increased scrutiny from regulators and law enforcement agencies around the world. It remains to be seen how this controversial move by Trump will impact the ongoing efforts to combat illicit activities in the crypto space.