After Pleading Guilty, BitMEX’s Delo Will Not Go to Prison

The court decided that Ben Delo will not face prison time after pleading guilty to violating the Bank Secrecy Act earlier this year. The main reason for this decision was Delo’s “substantial assistance” in providing information about the now-defunct cryptocurrency exchange, BitMEX.

This is a huge relief for Delo, who could have faced up to five years in prison if he had been convicted on all charges. It is also a positive development for the cryptocurrency industry as a whole, as it shows that regulators are willing to work with those willing to cooperate with them.

It remains to be seen what will happen to BitMEX itself, but Delo will not be going to prison, thanks to his cooperation with authorities.

Delo’s guilty plea and settlement are just the latest developments in a long-running legal saga that began in 2020. The case against Delo and Hayes stemmed from a series of trades made on BitMEX that violated the Bank Secrecy Act. The U.S. Department of Justice (DOJ) and Commodity Futures Trading Commission (CFTC) filed their lawsuit against Delo and Hayes, alleging that the two had engaged in illegal trading activity.

In pleading guilty, Delo has admitted to breaking the law. This is likely just the beginning of his legal troubles, as he still faces potential charges from other agencies. However, by settling with the DOJ and CFTC, Delo has avoided a lengthy trial that could have resulted in an even more significant fine or jail time.

The case against Delo and Hayes is just one example of the increased scrutiny cryptocurrency exchanges have faced from government agencies in recent years. As more people use cryptocurrencies like Bitcoin, these exchanges have come under fire for their lack of regulation and transparency. If nothing else, this case should warn other exchanges that they need to be careful about how they operate if they want to avoid similar problems down the road.

The spokesperson went on to say that the government’s decision to pursue charges against Delo was “overzealous” and that the sentence handed down by the court reflects that. The spokesperson also said that Delo is looking forward to putting this incident behind him and moving on with his life.

DOJ, CFTC, and FinCEN Investigation

The charges come after an extensive investigation by the DOJ, CFTC, and FinCEN into BitMEX’s practices. The exchange has been operating since 2014 and, in that time, has become one of the most popular crypto derivatives exchanges in the world. However, it has never been registered with any U.S. regulatory body and has had poor know-your-customer practices. This has allowed U.S. residents to trade on the exchange without going through the proper channels or meeting KYC requirements.

The DOJ’s charges against BitMEX are extensive and range from civil to criminal. The main thrust of the DOJ’s argument is that BitMEX violated both civil and criminal statutes by allowing U.S. residents to trade crypto derivatives on the exchange despite not being registered in the country and having poor know-your-customer practices.

The CFTC has also charged BitMEX with operating an unregistered trading platform and violating multiple CFTC regulations, including failing to implement proper anti-money laundering safeguards. In its announcement, the CFTC noted that this is the first time it has brought an enforcement action against a crypto exchange.

FinCEN has filed a parallel action charging BitMEX with willfully violating multiple provisions of the Bank Secrecy Act by failing to implement adequate anti-money laundering controls, amongst other things. This is the first time FinCEN has taken action against a crypto entity.

The charges against Delo were announced alongside those against the exchange itself and its other co-founders, which resulted in a leadership change at the company. BitMEX settled with the CFTC and FinCEN last summer, agreeing to pay $100 million in fines between the two agencies.

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