On March 27, President Donald Trump granted full pardons to the three co-founders of the cryptocurrency exchange BitMEX, effectively exonerating them years after they acknowledged breaching U.S. anti-money laundering regulations.
Arthur Hayes, Benjamin Delo, and Samuel Reed, who established BitMEX in 2014, had each admitted guilt to charges related to the Bank Secrecy Act.
### Pardons
Prosecutors argued that they permitted U.S. users to engage in trading on the platform without adequate identity verification, which led to the exchange being described by authorities as a center for illicit financial activities.
In 2022, the three founders received probation sentences and paid tens of millions in fines to settle both criminal and civil enforcement matters. Hayes, the former CEO, spent six months under home confinement, while Delo, the company’s former strategy chief, was sentenced to 30 months of probation. Reed, the former CTO, received an 18-month probation term.
Trump’s pardons were issued just over three months after BitMEX itself agreed to a $100 million settlement for allegations of failing to implement necessary compliance programs to detect and prevent money laundering.
Federal prosecutors claimed that the company’s leadership disregarded their legal responsibilities while still seeking business from American traders. Court documents revealed that BitMEX allowed users to sign up with merely an email address and did not effectively enforce its prohibition on U.S. customers.
In a response following the announcement of the pardons, Delo criticized the charges as arising from what he characterized as an outdated law and a politically driven enforcement strategy. He referred to the pardons as a “vindication” and maintained that the three should never have faced prosecution.
Delo stated:
> “We were wrongfully made to serve as an example.”
Hayes, Delo, and Reed each paid $10 million in criminal fines as part of their plea agreements, in addition to a $30 million civil penalty levied by the Commodity Futures Trading Commission.
No formal comment on the pardons has been released by the White House.
### BitMEX Case
Founded in 2014, BitMEX quickly emerged as one of the earliest and most influential derivatives exchanges in the cryptocurrency sector, providing users with high-leverage trading options and minimal registration prerequisites.
At its peak, the platform processed billions in daily trading volume and attracted a global clientele, including customers from the U.S. Federal authorities initiated investigations into BitMEX as part of a broader effort to crack down on offshore platforms catering to American traders without proper compliance measures.
In 2020, the U.S. Department of Justice and the CFTC initiated parallel legal actions against both the exchange and its founders. Prosecutors charged the leaders with knowingly dodging U.S. regulations and failing to create even basic systems to identify or prevent money laundering.
This case represented one of the first instances in which the federal government sought criminal penalties against cryptocurrency exchange operators, establishing a precedent for future enforcement measures in the digital asset realm.