President Donald Trump pardoned the three founders of cryptocurrency trading platform BitMEX—Arthur Hayes, Benjamin Delo, and Samuel Reed—as well as former executive Gregory Dwyer, a White House spokesperson confirmed on Friday. CNBC, reported first on the news.

According to the press release by the United States Attorney’s office in 2022, the four men plead guilty “to violating the Bank Secrecy Act (the “BSA”) by willfully failing to establish, implement, and maintain an anti-money laundering (“AML”) program at BitMEX”. Hayes was placed on probation for two years, Delo for thirty months, and Reed for eighteen months. Dwyer was placed on probation for a year. Prosecutors had maintained that BitMEX’s poor compliance controls permitted the exchange to be utilized for possible financial crime. The case was viewed as a landmark moment in overseeing cryptocurrency exchanges.

Crypto Regulation and Presidential Clemency

The pardons align with the president’s continued efforts to project himself as a bitcoin sector supporter.  His administration has generally been regarded as supportive of more liberal restrictions by the digital asset space, and some corporate executives have expressed faith in his approach to financial oversight. According to CNBC, which first broke the news, the pardons were issued by Trump on Thursday, more than three months since BitMEX was fined $100 million for not having in place and maintaining know-your-customer and anti-money-laundering measures in contravention of the Bank Secrecy Act.

Arthur Hayes, taking to his X account on Friday (formerly Twitter), posted a heartfelt gratitude to President Trump and wrote: “Thank you @POTUS.” According to USA Today, Delo in a statement thanking President Trump said, “This full and unconditional pardon by President Trump is a vindication of the position we have always held – that BitMEX, my co-founders and I should never have been charged with a criminal offense through an obscure, antiquated law.” 

According to federal prosecutors, businesses involved in the virtual economy have a crucial role as gatekeepers to guarantee that markets are secure, efficient, and equitable as cryptocurrencies grow in popularity. The creators of BitMEX allegedly neglected to put even the most basic anti-money laundering procedures in place, according to the-U.S. Attorney Damian Williams.

The move by Trump to pardon the founders of BitMEX indicates a more lenient tack his administration has been taking towards financial compliance and crypto regulation. While most view the move as promoting innovation in the digital asset space, critics warn that it could make it harder to enforce anti-money laundering rules. There has been a reaction ranging from the lukewarm to outright criticism to Trump’s use of the pardoning power. The BitMEX executives have already served their time, as much as supporters are concerned, but others believe the action shows a soft approach to financial regulation and white-collar crime.

As the bitcoin market keeps growing, regulatory oversight is still a major concern. Although there are concerns regarding the long-term effects on investor protection and financial supervision, the pardons might represent a change in direction toward a more industry-friendly strategy. It is unclear if this action will establish a precedent for enforcement in the future or not.

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