BitMEX Ends Battle with Regulators, as Delo Bags 30 Months Probation

BitMEX’s age-long legal battle with both the United States Department of Justice and the Commodities Futures Trading Commission (CFTC) for violating the Bank Secrecy Act (BSA), has finally come to an end. BitMEX co-founder, Benjamin received 30 months probation without confinement, on June 15, 2022.

BitMEX Ends Legal Tussle with U.S. Regulators 

After two years of a serious legal tussle with the United States Department of Justice (DOJ) and the Commodities and Futures Trading Commission (CFTC), Bitcoin Mercantile Exchange (BitMEX), a Seychelles-based bitcoin derivatives exchange, has successfully resolved its case with the regulators.

BitMEX co-founder Benjamin Delo has been placed on 30 months probation without home confinement for his involvement in the company’s violation of the Bank Secrecy Act (BSA) by failing to integrate anti-money laundering (AML) controls into their processes.

Commenting on the outcome of the case, an unnamed spokesperson for the Smith Villazor law firm which represented Delo expressed their excitement over the court’s rejection of the U.S. government’s “cynical attempt to exaggerate the seriousness of the BSA violation,” adding

“Today’s sentence of probation recognizes that this case involved a compliance lapse that led to a regulatory violation and nothing more. The government’s campaign -both in the courtroom and in the press – to malign Ben with highly inflammatory and misleading language concerning Ben’s conduct gained no traction with the court.”

How it All Began 

BitMEX was first pushed onto the radar of U.S. regulators in July 2019, after one of crypto’s biggest haters, Nouriel Roubini repeatedly accused BitMEX and its co-founders of being involved in systematic illegality and fraudulent practices. 

Shortly after Roubini’s scathing attacks, reports emerged that the CFTC had launched investigations into the activities of BitMEX. 

In October 2020, BitMEX co-founder Delo was arrested by U.S. authorities and was charged with disregarding the government’s Bank Secrecy Act and contriving to abuse the law, alongside other members of the BitMEX team, including Arthur Hayes, Samuel Reed, and Gregory Dwyer.

“We unequivocally can’t help contradicting the U.S. government’s blundering choice to bring these charges, and expect to guard the claims overwhelmingly,” declared a representative of the firm at the time. 

 As reported by crypto.news last February, the DOJ announced that the BitMEX co-founders’ Benjamin Delo and Arthur Hayes had pleaded guilty to flouting the country’s  AML laws by servicing U.S. residents without mandating them to complete their KYC procedures.

Hayes and Delo agreed to pay $10 million each as a criminal fine to represent the pecuniary profits they made from their illegal operations.

While BSA violations attract a maximum jail sentence of five years, the timely settlement between the co-founders of the bitcoin trading venue enabled the DOJ to water down the penalty. 

In related news, the combined market capitalization of the cryptocurrency market is now back to $910.15 billion from an all-time high of over $3 trillion. At the time of writing, bitcoin (BTC) is hovering around $21,2017, according to CoinMarketCap.