President Donald Trump made headlines on March 27 by granting full pardons to the three co-founders of BitMEX, a popular cryptocurrency exchange. Arthur Hayes, Benjamin Delo, and Samuel Reed, who started BitMEX back in 2014, had previously admitted to violating US anti-money laundering laws under the Bank Secrecy Act.
The trio had faced allegations of allowing US customers to trade on the platform without proper identity verification, leading to the exchange being labeled as a hub for illicit financial activities. In 2022, Hayes, Delo, and Reed pleaded guilty to the charges, resulting in probation sentences and hefty fines amounting to tens of millions of dollars to settle both criminal and civil enforcement actions.
Following the co-founders’ admissions, BitMEX itself agreed to a $100 million settlement to resolve claims of inadequate compliance programs for detecting and preventing money laundering. Federal prosecutors had accused the company’s leadership of disregarding legal obligations and actively seeking business from American traders, despite banning US customers on paper.
In response to the pardons, Benjamin Delo expressed relief, stating that the charges were based on outdated laws and a politically motivated enforcement campaign. He described the pardons as a form of vindication, highlighting that the trio should never have been prosecuted in the first place. Each co-founder had already paid $10 million in criminal fines as part of their plea agreements, in addition to a $30 million civil penalty imposed by the Commodity Futures Trading Commission.
BitMEX, founded in 2014, quickly rose to prominence as a leading derivatives exchange in the cryptocurrency industry, offering high-leverage trading products with minimal registration requirements. Despite processing billions in daily volume at its peak and attracting users globally, including those from the US, the exchange came under scrutiny from federal authorities for failing to implement adequate compliance measures.
The US Department of Justice and the CFTC filed legal actions against BitMEX and its founders in 2020, accusing them of intentionally sidestepping US regulations and neglecting to establish basic anti-money laundering systems. This marked a significant moment in the government’s crackdown on offshore crypto platforms targeting American traders without proper compliance protocols, setting a precedent for future enforcement actions in the digital asset space.
The White House has refrained from making an official statement regarding the pardons, leaving the crypto community and legal experts speculating about the implications of Trump’s decision on the broader regulatory landscape. As the industry continues to evolve and face increased scrutiny, the BitMEX case serves as a cautionary tale for crypto exchanges and operators navigating the complex regulatory environment.