Trump Pardons BitMEX Co-Founders, Highlighting Crypto Industry Support

President Donald Trump has reportedly pardoned the three co-founders of the crypto exchange BitMEX, including prominent crypto investor Arthur Hayes. The pardons, which were signed on Thursday, come nearly three years after Hayes, Benjamin Delo, and Samuel Reed pleaded guilty to violating the Bank Secrecy Act by willfully failing to establish adequate anti-money laundering protocols.

Prosecutors had accused the trio of operating BitMEX as if it were a “money laundering platform,” as the exchange did not implement typical Know Your Customer (KYC) verification standards. These standards are designed to certify a customer’s identity as a means of preventing crime. Instead, 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 from approximately 2014 through 2020.

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 pleaded guilty to violating the Bank Secrecy Act. At the time, U.S. Attorney Damien Williams stated that the crypto exchange’s actions posed a serious threat to the integrity of the financial system. Williams emphasized the need for cryptocurrency companies to comply with U.S. law if they take advantage of the U.S. market.

The pardons also extend to a fourth individual, Gregory Dwyer, a former high-ranking employee of BitMEX, and an entity owning and operating the crypto exchange. This action comes at a time when the crypto industry is optimistic about potential looser regulations under Trump's administration. Trump had courted crypto donors during his campaign and had promised support for the industry.

These pardons are seen as a significant move that could influence the regulatory landscape for cryptocurrencies. The pardons come after BitMEX was fined $100 million in January for similar violations. Additionally, Trump pardoned Trevor Milton, the founder of bankrupt electric and hydrogen-powered truckmaker Nikola, who had been convicted of fraud. The pardons highlight Trump's support for the crypto industry and his willingness to intervene in regulatory matters, potentially setting a precedent for future actions in the sector.