President Donald Trump is reportedly pardoning the three co-founders of the crypto exchange BiTMEX, including prominent crypto investor Arthur Hayes.
According to a new report by CNBC, Trump pardoned Hayes, Benjamin Delo and Samuel Reed on Thursday, nearly three years after they pleaded guilty to violating the Bank Secrecy Act by willfully failing to establish adequate anti-money laundering protocols.
At the time, prosecutors accused the trio of operating BitMEX as if it were a “money laundering platform,” as instead of implementing typical Know Your Customer (KYC) verification standards, which are a set of regulations designed to certify a customer’s identity as a means of preventing crime.
“From approximately 2014 through 2020, BitMEX allowed customers to access its platform and conduct derivative trading without appropriate customer due diligence – collecting only an email address and failing to verify customer identity.”
Hayes, Delo and Reed received sentences of probation and were forced to pay tens of millions of dollars worth of fines.
In July of last year, BitMEX itself – which was founded about a decade earlier – pleaded guilty to violating the Bank Secrecy Act as well. At the time, U.S. Attorney Damien Williams said that the crypto exchange’s antics were a danger to the US financial system.
Said Williams,
“BitMEX opened itself up as a vehicle for large-scale money laundering and sanctions evasion schemes, posing a serious threat to the integrity of the financial system. [This] guilty plea indicates again the need for cryptocurrency companies to comply with US law if they take advantage of the US market.”
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