- Delo will spend his probation in Hong Kong before returning to his wife.
- Prosecutors allege that the three failed KYC processes for their U.S. client base.
According to the Wall Street Journal, an anti-money laundering banking secrecy act violation by BitMEX exchange co-founder Benjamin Delo has resulted in a 30-month probation term. Delo’s involvement in the BitMEX legal process, which has been underway since October 2020, ends with this judgement. Delo will spend his probation in Hong Kong before returning to his wife and family, possibly within days.
Anti-Money Laundering Violation
In February, Delo and Arthur Hayes admitted they had failed to “willfully failing to establish, implement and maintain an Anti-Money Laundering (AML) program.” CFTC fined Delo and co-founders Samuel Reed and Arthur Hayes $10 million each in May for breaching anti-money laundering (AML) requirements. Delo paid his share of the money.
Prosecutors allege that the three failed to implement KYC processes for their U.S. client base, making their exchange a de facto money laundering platform and processing up to $209 million in questionable transactions.
In January 2021, BitMEX completed its users’ KYC process. Patrick Smith, Delo’s lawyer, stated that Delo had personally stopped hundreds of individuals from trading on BitMEX. However, Delo admitted that he wished he had taken action sooner to assure that the exchange was no longer servicing consumers in the United States.
After Delo and Hayes pled guilty to breaking the Banking Secrecy Act, Samuel Reed did the same. He might face up to five years in prison. Hayes, like Delo, was sentenced to two years of probation. A year in prison was the original request of the prosecution, but Hayes claimed that his case might serve as a precedent for other cases. For the first six months of his sentence, he will be housebound.