BitMEX Founder Delo Surrenders to Face Bank Secrecy Charges
Red light illuminates cooling fans used to cool cryptocurrency mining rigs at the SberBit mining ‘hotel’ in Moscow, Russia. (Photographer: Andrey Rudakov/Bloomberg)

BitMEX Founder Delo Surrenders to Face Bank Secrecy Charges

One of the founders of pioneering crypto-derivatives exchange BitMEX surrendered to authorities to face charges that he schemed to avoid U.S. anti-money laundering laws.

Benjamin Delo, who traveled to New York from the U.K., was arraigned before U.S. Magistrate Judge Sarah L. Cave during a remote proceeding on Monday. He pleaded not guilty and was released on a $20 million bail bond. The terms of his bail allow him to return to the U.K.

An Oxford-educated computer scientist who previously created high-frequency trading systems for JPMorgan Chase & Co, Delo founded BitMEX with Arthur Hayes and Samuel Reed in 2014. Once the world’s largest crypto-derivatives exchange, Bitmex invented perpetual Bitcoin futures that were easy for retail investors to understand and gained popularity for letting investors leverage their bets.

All three were charged in October by federal prosecutors in New York with flouting banking laws intended to ensure that the platform is not used for illegal purposes while serving U.S. customers. The government said the executives ignored requirements that it register with the Commodity Futures Trading Commission and failed to establish an adequate anti-money laundering program.

The charges are unfounded and an overreach by U.S. authorities, and Delo intends to defend himself against the charges and clear his name in court, a spokesperson for the BitMEX founder said in a statement.

Federal prosecutors said earlier this month that Hayes was in Singapore and has discussed surrendering in Hawaii in early April. Reed was arrested in Massachusetts last year. A fourth defendant, Gregory Dwyer, the exchange’s first employee and head of business development, is still at large.

The founders stepped aside from their roles at the holding group behind BitMEX after the charges were unveiled. The company appointed Alexander Hoptner as chief executive officer in November.

The four men are each charged with one count of violating the Bank Secrecy Act and one count of conspiring to violate the act, each of which carries a maximum term of five years in prison.

The case is U.S. v Hayes, 20-cr-500, U.S. District Court, Southern District of New York.

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