Arthur Hayes, chief executive officer of BitMEX, speaks during the Consensus: Invest event in New York, U.S., on Tuesday, Nov. 28, 2017.
Michael Nagle | Bloomberg | Getty Images
President Donald Trump has granted pardons to three co-founders of the BitMEX global cryptocurrency exchange, CNBC has learned.
The co-founders, former BitMEX CEO Arthur Hayes, Benjamin Delo and Samuel Reed, previously pled guilty to a range of federal criminal charges related to money laundering and failure to police the exchange.
The trio received criminal sentences of probation, and were ordered to pay civil fines totaling $30 million related to a lawsuit by the Commodity Futures Trading Commission.
The three men also separately agreed to each pay a $10 million criminal fine related to gains from their conduct, according to prosecutors’ statements at the time.
Prosecutors accused the men of effectively operating BitMEX as a “money laundering platform” and that its purported withdrawal from the U.S. market was “a sham.”
Trump issued the pardons on Thursday, more than three months after BitMEX was sentenced to pay a fine of $100 million for violating the Bank Secrecy Act by failing to establish and maintain anti-money-laundering and “know your customer” programs.
Hayes, Delo and Reed founded BitMEX in 2014. Prosecutors said the executives knew that the exchange was required to implement an anti-money laundering plan because it served U.S. customers “but chose to flout those requirements, requiring only that customers provide an email address to use BitMEX’s services.”
“Indeed, senior executives each knew that customers residing in the U.S. continued to access BitMEX’s trading platform through at least in or about 2018, and that BitMEX policies nominally in place to prevent such trading were toothless or easily overridden to serve BitMEX’s bottom line goal of obtaining revenue through the U.S. market without regard to U.S. criminal laws,” the Manhattan U.S. Attorney’s Office said in a statement in January.
Delo, the former chief operating officer and chief strategy officer of BitMEX, had been sentenced to 30 months of probation after his guilty plea in U.S. District Court in Manhattan.
Hayes was sentenced to six months of home confinement, followed by two years of probation.
Reed, who is the exchange’s former chief technology officer, was sentenced to 18 months of probation.
Trevor Milton, the founder and former CEO of electric truck maker Nikola, revealed Thursday night that Trump had pardoned him for his criminal conviction for securities fraud. Milton had been sentenced to four years in prison in that case, but remained free on appeal.
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