BitMEX co-founder Benjamin Delo avoids jail, receives 30 months probation

Published at: June 16, 2022

Benjamin Delo, co-founder of cryptocurrency exchange BitMEX, has been sentenced to 30 months probation for violating the Bank Secrecy Act (BSA), which is an Anti-Money Laundering (AML) law.

The sentence, handed down at a federal court in New York on Wednesday, follows his guilty plea to charges in February of “willfully failing to establish, implement and maintain an Anti-Money Laundering (AML) program” in his role at BitMEX.

Prosecutors had argued Delo should serve a year in prison or at least receive a two-year probation and six months of home detention, as was given to former CEO Arthur Hayes in May.

For Delo, his lesser sentence closes the legal saga which started in October 2020, which also saw co-founders Hayes, Samuel Reed and BitMEX’s first official employee Gregory (Greg) Dwyer, charged with similar violations.

Judge John Koeltl called Delo’s violations “very serious” and said that he knew BitMEX was breaking United States laws by not implementing an AML and Know Your Customer (KYC) regulations.

Judge Koeltl noted, however, that the exchange later took steps to rectify the issue and become compliant.

“When I look back, I see a fundamental failure to address a flaw in our systems,” Delo told the court, adding that he deeply regrets the actions that brought him in contact with the justice system and vowed that it would be his last brush with it.

As a citizen of the United Kingdom residing in Hong Kong, Judge Koeltl ordered Delo to be allowed to serve his probationary sentence in Hong Kong.

Judge Koeltl also took into consideration the fact that Delo paid a $10 million fine settling a court order from May in a civil case brought by the Commodity Futures Trading Commission (CFTC) for violating aspects of the Commodity Exchange Act.

A spokesperson for Delo’s legal team said after the sentencing hearing they’re pleased the court rejected “the government’s cynical attempt to exaggerate the seriousness of the Bank Secrecy Act charge in this case.

Delo’s lawyers said he intends to soon leave the U.S. for Hong Kong.

Meanwhile, Australian-born former BitMEX head of business development Greg Dwyer, who currently resides in Bermuda, is in talks with the New York federal court to extend a deadline for filing pre-trial documentation, according to the Sydney Morning Herald.

A letter sent to the court by Dwyer’s lawyer said “the parties continue to engage in discussions regarding a possible resolution to the matter.”