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, delivered Wednesday in federal court in New York, It comes after he pleaded guilty to charges brought against him in February for “intentionally failing to establish, implement and maintain an anti-money laundering (AML) program” in his role at BitMEX.
Prosecutors had argued that Delo should serve a year in prison or at least receive two years of probation and six months of house arrest. as imposed on former CEO Arthur Hayes in May.
For Delo, his lesser sentence caps the legal saga that began in October 2020, in which co-founders Hayes, Samuel Reed, and BitMEX’s first official employee, Gregory (Greg) Dwyer, were accused of similar violations.
Judge John Koeltl called Delo’s breaches “very serious” and said he knew BitMEX was breaking US law. by not applying AML and Know Your Customer (KYC) regulations.
Nevertheless, Judge Koeltl noted that the exchange subsequently took steps to rectify the matter and comply with regulations.
“As 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 into contact with justice and swore that it would be his last brush with it.
As a UK citizen residing in Hong Kong, Judge Koeltl ordered that Delo be allowed to serve out his probation sentence in Hong Kong.
Judge Koeltl also took into account the fact that Delo paid a $10 million fine to settle a May injunction in a civil case brought by the Commodity Futures Trading Commission (CFTC) for violating aspects of the Commodity Exchange Act.
After sentencing hearing, A spokesman for Delo’s legal team said he was pleased the court had 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 leave the United States soon for Hong Kong.
In the meantime, Australian-born former BitMEX head of business development Greg Dwyer, currently residing in Bermuda, is in talks with the New York federal court to extend the deadline for filing pre-trial papers, according to the Sydney Morning Herald.
A letter sent to the court by Dwyer’s attorney said “the parties are continuing discussions regarding a possible resolution of the matter.”
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