Federal authorities were able to use some leniency when sentencing Delo after he settled for $10 million with CFTC. Yesterday, BitMEX co-founder Benjamin Delo was sentenced by a New York federal Court to 30 months probation for violating the Anti-Money Laundering Banking Secrecy Law. According to The Wall Street Journal.
This sentence ends Delo’s role in BitMEX’s legal saga that has been ongoing since Oct 2020. Delo will be returning to his wife and Hong Kong home “potentially in days,” where he will complete his probation.
In February, Delo and Arthur Hayes , former CEO of BitMEX, pleaded guilty ” willfully failing establish, implement, and maintain an Anti-Money Laundering program (AML).”
The Commodity Futures Trading Commission ordered Delo and co-founders Samuel Reed, as well as CEO Arthur Hayes to each pay $10,000,000 each for violating AML laws. Delo was fully compliant.
Federal prosecutors accused the trio of failing to establish know your customer (KYC), procedures for their U.S. customers. This meant that their exchange was a de-factomoney laundering portal and processed up to $209,000,000 in suspicious transactions.
BitMEX eventually KYC all its users in January 2020.
Patrick Smith, Delo’s lawyer, claimed that Delo had banned hundreds of BitMEX users from trading. However, Delo admitted that he would have preferred to act sooner to ensure the exchange wasn’t serving U.S customers.
How did the other founders of BitMEX fare?
Samuel Reed, a member of Delo and Hayes and , pleaded guilty in March to the Banking Secrecy Act. A maximum sentence of five years in prison is possible for him.
According to , Hayes was also placed on probation for two years like Delo. Hayes said that although he was initially wanted to be imprisoned for one year, he could serve as a precedent for the future. He was ordered to spend six months in home confinement.
According to a report from the Sydney Morning Herald yesterday, Greg Dwyer is an Australian Bitcoin mogul who is not a BitMEX founder but was the former head of business development at the exchange. He is currently negotiating with New York’s federal court to extend his deadline to file pre-trial documentation by one week.