BitMEX co-founder sentenced to six months house arrest
Arthur Hayes and the other founders of the exchange were accused of violating the US Bank Secrecy Act
21.05.2022 - 07:50
What’s new? The co-founder and former CEO of the BitMEX cryptocurrency exchange, Arthur Hayes, received six months of house arrest and two years’ probation. In October 2020, Hayes and two other BitMEX founders, Benjamin Delo and Samuel Reed were charged with violating the Bank Secrecy Act, which requires the creation of protective measures such as verifying the identities of the exchange’s customers in the United States. This is reported by Bloomberg.
How did events develop? In April 2021, Hayes went on trial but was released on $10 million bails. In February 2022, Hayes and Delo pleaded guilty to willfully failing to implement an anti-money laundering (AML) program. Reed pleaded guilty in March. Another BitMEX employee, Gregory Dwyer, pleaded not guilty and is due to appear in court in October. The judge noted:
“He [Arthur Hayes] knew these procedures were required to avoid having his company used for money laundering and other illegal purposes. The crime was more than a simple regulatory oversight.”
What do the prosecutors say? According to the US Treasury Department, as of August 2021, BitMEX conducted transactions worth at least $209 million “with known darknet markets or unregistered money services businesses providing mixing services.” BitMEX has agreed to pay $100 million in fines to regulatory authorities.
On May 5, the US District Court for the Southern District of New York ruled that co-founders of the exchange must pay a fine of $30 million. The court also warned the three founders against further violations of the Commodity Exchange Act (CEA) and the Commodity Futures Trading Commission (CFTC) rules.
Meanwhile, Hayes continues to publish reviews of the digital assets market. At the end of April, for example, he predicted the price of bitcoin to rise to $1 million by 2030. Previously, Hayes reported the possibility of the collapse of the crypto market by the summer of 2022. He noted that the rate of BTC would fall to $30 000 and ETH to $2 500. As of May 21, 11:10 Moscow time, the currencies are trading at $29 449 and $1981 respectively, according to Binance.
What is known about BitMEX? The cryptocurrency derivatives exchange was founded in 2014 and is headquartered in Seychelles. There are 60 currency pairs on the platform. In 2016, the exchange introduced perpetual futures. As of May 21, the daily trading volume stands at $791 million, according to CoinGecko. In early April 2022, BitMEX cut a quarter of its staff. This came after the exchange’s subsidiary BXM Operations AG refused to buy the German bank, Bankhaus von der Heydt.
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