Trump Pardons BitMEX Founders, Shifts Crypto Regulation

President Trump has granted pardons to Arthur Hayes, Benjamin Delo, and Samuel Reed, the co-founders of BitMEX, who had pleaded guilty to federal charges related to money laundering and operating an unregistered trading platform. This move has sparked discussions about potential pardons for other high-profile figures in the cryptocurrency industry, including Do Kwon, the co-founder of Terraform Labs. Kwon was extradited to the United States in December 2024 and is facing multiple fraud charges related to the 2022 Terra crash. The pardon for the BitMEX founders has raised questions about whether similar clemency could be extended to Kwon, given the significant impact of the Terra collapse on investors and the broader cryptocurrency market.

Trump’s pardon for the BitMEX founders is a major shift in U.S. crypto regulation. Previously, the executives had settled their cases by paying $30 million in fines and serving prison sentences. With this pardon, they are now free from any legal restrictions. This decision follows Trump’s earlier pardon of Silk Road founder Ross Ulbricht, reinforcing his softer stance on crypto-related offenses. The legal battle between Terra vs. SEC continues, and some in the crypto community believe that Trump’s decision could set a precedent in favor of Kwon. If a similar pardon is granted, it could open new opportunities for Terra and potentially reshape how crypto firms handle regulatory challenges.

The U.S. SEC has also been showing signs of changing its approach. Recently, it dropped charges against Hailey Welch, the influencer linked to the HAWK token. This marks a shift from aggressive crackdowns to a more balanced regulatory stance. Instead of punishing individuals without solid evidence, the SEC’s decision suggests a move toward clearer guidelines and fairer enforcement. While the crypto community cheers Trump’s pardon spree, Crypto expert and veteran Peter Schiff lashed Trump’s pardons of crypto executives, stating that while he opposes most anti-money laundering (AML) laws, he believes those pardoned were guilty. He also mentioned that the IRS attempted to indict him for AML violations for years but failed due to his bank’s clean records.

Moreover, Paul Atkins, Trump’s nominee to lead the SEC, could give a positive boost. Unlike Gary Gensler, who focused on enforcement actions, Atkins has promised a structured and transparent regulatory framework. Many believe his leadership could encourage institutional investment and the broader adoption of digital assets. However, his own crypto investments, worth nearly $6 million, have raised concerns about potential conflicts of interest. With the changing trend, Trump’s recent decisions could set the stage for more favorable policies toward crypto. Whether this extends to Do Kwon remains uncertain, but the industry is watching closely.

The situation highlights the ongoing legal and regulatory challenges faced by the cryptocurrency industry, as well as the potential for high-profile pardons to influence public perception and market dynamics. The pardon for the BitMEX founders has raised questions about whether similar clemency could be extended to Kwon, given the significant impact of the Terra collapse on investors and the broader cryptocurrency market. The future of crypto regulation remains uncertain, but the industry is closely monitoring the developments and their potential implications for the broader adoption of digital assets.