- BitMEX co-founder Ben Delo has pleaded not guilty to charges relating to the trading platform
- Delo flew to the US to be arraigned but has returned to the UK on bail
- BitMEX employed no AML/KYC protocols and may have allowed individuals from sanctioned countries to trade
BitMEX co-founder Ben Delo has pleaded not guilty to charges of illegally operating cryptocurrency trading facilities after handing himself over to authorities in New York. Delo and three other BitMEX executives were among four charged by the Commodity Futures Trading Commission (CFTC) with a variety of financial crimes last October. Delo, who worked on the BitMEX trading engine, flew to New York from the UK to be arraigned before a US magistrate where he was released on a $20 million bail with a trial expected later this year.
BitMEX Allegedly Flouted AML/KYC Laws
BitMEX was founded by Delo, Arthur Hayes, and Samuel Reed in 2014 where they invented the concept of Bitcoin perpetual contracts, quickly cornering the market in leverage trading. However, the company did not employ any KYC/AML protocols and as such anyone from any country was allowed to trade on the platform, including nationals from countries on the US sanctions list, such as Iran.
As the crypto space grew, BitMEX drew the attention of authorities, resulting in a CFTC investigation in 2019. This investigation resulted in the trio being charged with various crimes relating to the unregulated nature of the exchange along with Gregory Dwyer, the exchange’s first employee and head of business development.
The Net is Closing
Reed was arrested shortly after the charges were unsealed in October, but it has proved harder to apprehend the others. Hayes is said to be negotiating with authorities to hand himself over in April, whereas Dwyer is still at large. Having negotiated the terms of his arrest for months, Delo agreed to hand himself over as long as he could return to the UK on bail, which was agreed.
Delo pleaded not guilty to failing to implement an AML program at BitMEX and conspiracy to violate the Bank Secrecy Act, with his attorney telling Bloomberg that, “The charges against Ben are unfounded and represent unwarranted overreach by the U.S. authorities.”
