The co-founder of BitMEX, Benjamin Delo, is sentenced to a 30-month probation period for violating the U.S. Bank Secrecy Act (BSA).
In February, BitMEX Founders Arthur Hayes, Benjamin Delo, and Samuel Reed pleaded guilty for violating the BSA and inadequate anti-money laundering (AML) protocols.
Prosecutors claimed that Mr. Delo and other BitMEX founders intentionally violated US law by neglecting to establish KYC processes at BitMEX.
They stated that BitMEX failed to appropriately address an increase in U.S. based consumers who should have been examined more thoroughly.
The prosecutors also said that once Mr. Delo and his co-founders recognised that they could be subject to US law if they hosted US clients, they only put little effort to keep US residents off the site.
Judge John G. Koeltl sentenced Delo to 30 months probation at yesterday’s hearing. Delo’s regulatory cases involving BitMEX are now closed as a result of the sentencing.
The prosecution in both Hayes’ and Delo’s cases wanted tougher sentences than what was given. In Hayes’ case, the DOJ demanded more than the standard 6-12 months in prison, despite Hayes’ attorneys’ proposal for probation.
Hayes avoided prison but was sentenced to six months of home detention as part of a two-year probationary period.
In Delo’s case, it contended that the co-founders’ punishments should be equal, and that Delo should receive the same sentence as Hayes.
The judge finally refused to include house detention as part of Delo’s sentence.
Prosecutors sought a prison sentence for Mr. Delo, but admitted that it would be unjust given that Mr. Hayes, who was previously the flag bearer of BitMEX, was sentenced to only home arrest.
After serving his six-month home detention sentence in the United States, Hayes will be allowed to travel to his home in Singapore for the rest of his probation.
Prior to his sentencing, Delo’s legal team submitted a letter requesting a probationary term with no fine or jail time to be spent in Hong Kong.
Maybe within days Delo will be allowed to return to his house in Hong Kong, where he had lived with his wife until being charged.
Last month, Hayes, Delo and Reed were also fined $30 Million by CFTC where each of them had to pay $10 million dollars.
A spokesperson from Smith Villazor, representing Delo, stated “We are pleased that the Court appropriately rejected the government’s cynical attempt to exaggerate the seriousness of the Bank Secrecy Act charge in this case.”
