(Bloomberg) -- BitMEX co-founder Arthur Hayes was sentenced to two years’ probation for failing to implement an anti-money-laundering program at the pioneering cryptocurrency exchange.

The sentence comes after Hayes, and BitMEX’s other founders, Benjamin Delo and Samuel Reed, were charged in 2020 with violating the Bank Secrecy Act by not establishing practices to prevent money laundering and to verify the identities of the exchange’s customers. They were also charged with conspiring to violate the act.

Before US District Judge John Koeltl pronounced the punishment on Friday, Hayes told the judge that he took “full responsibility” for his role in BitMEX’s failure to implement the measures.

“I know that my best years are ahead of me,” Hayes, 36, said in federal court in Manhattan. “I will always have to live with the consequences of these actions. I am ready to turn the page and start again.”

‘Sophisticated Businessman’

Koeltl said Hayes was “a sophisticated businessman.”

“He knew these procedures were required to avoid having his company used for money laundering and other illegal purposes,” the judge said. “The crime was more than a simple regulatory oversight.”

He also sentenced Hayes to home confinement for six months.

Prosecutors and regulators are increasing their scrutiny of digital asset exchanges amid a broader focus on cryptocurrency. US Securities and Exchange Commission Chairman Gary Gensler said this month that some platforms are shirking rules and may be betting against their own customers. He has asked lawmakers to increase the agency’s budget as he seeks to require exchanges to register with the SEC.

Read More: BitMEX Founders Charged With Failing to Prevent Laundering 

BitMEX in August agreed to pay $100 million to settle allegations it allowed illegal trades for years and violated rules requiring anti-money-laundering programs, without admitting or denying the allegations.

Hayes and Delo pleaded guilty in February and Reed in March, and all agreed to forfeit $10 million each. Delo is scheduled to be sentenced next month and Reed in July. Another BitMEX employee charged in the scheme, former head of business development Gregory Dwyer, has pleaded not guilty and is set for trial in October. 

Prosecutors had asked Koeltl to send Hayes to prison for significantly more than a year, to help deter similar violations by cryptocurrency platforms. Hayes sought no jail time and the right to live abroad and travel freely, saying the case itself was a landmark that would help the US prosecute financial crimes at exchanges around the world. Probation officials recommended a sentence of two years of supervised release.

Crypto Derivatives Pioneer

Hayes founded BitMEX in 2014 with Delo, a computer scientist who built high-frequency trading systems for JPMorgan Chase & Co., and Reed, a programmer specializing in fast web applications. The exchange was among the first to offer cryptocurrency derivatives, such as futures contracts that allow investors to make leveraged bets on the market prices of different cryptocurrencies. 

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Despite admitting guilt, Hayes has remained active in the world of crypto and regularly posts essays outlining his thoughts on issues ranging from prices to the recent Terra stablecoin meltdown.

While BitMEX was once the largest crypto derivatives platform, Binance now dominates the field. BitMEX recently laid off about a quarter of its workforce of 300 people, not long after its planned acquisition of a German bank fell through. 

The company on Tuesday launched a spot exchange, which will start off with seven trading pairs including Bitcoin, Ether and Polygon versus the Tether stablecoin.

The case is US v. Hayes, 20-cr-500, US District Court, Southern District of New York (Manhattan).

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