Key Takeaways
- Co-founder of BitMEX sentenced to two years of probation for violating banking confidentiality.
- The United States holds BitMEX responsible for questionable transactions worth hundreds of millions of dollars.
- Arthur Hayes spent the first six months of his sentence under house arrest.
- Prosecutors claimed the court was obliged to send a signal.
The former CEO and co-founder of the crypto derivatives platform BitMEX was sentenced to two years of probation. Arthur Hayes spent the first six months of the sentence period at home.
Three of BitMEX’s founders were forced to resign as a result of the $100 million fine. Hayes’ attorneys have now asked for mercy in his sentence, which is slated to begin on May 20. Judge John Koeltl granted Hayes’ request on Friday. John Koeltl is the US District judge.
Arthur Hayes was instead sentenced to two years probation, with the first six months served at home. “This is a very serious offense,” Assistant US Attorney Samuel Raymond told US District Judge John Koeltl in Manhattan before Koeltl pronounced the sentence. “There were real consequences. When individuals like Mr. Hayes operate platforms without anti-money-laundering programs or know-your-customer programs, they become a magnet for people to launder money.”
Allowing Hayes to avoid prison “would send the message to him that the cost of doing business is merely a fee, and he could continue to violate the law for large sums and pay whatever punishment he received,” Raymond said. “Cryptocurrency exchanges and other companies around the world are closely monitoring this matter.”
Authorities and prosecutors are stepping up investigations of digital asset exchanges as the focus shifts toward cryptocurrencies. Earlier this month, Chairman Gensler of the Securities and Exchange Commission claimed that some platforms are abusing the rules and might even be betting against their customers. Congress should increase the SEC’s budget so it can force exchanges to register.
As part of their plea deals, Hayes and co-founder Benjamin Delo pleaded guilty in February, while Samuel Reed pleaded guilty in March. They each agreed to pay $10 million. Delo will be sentenced next month and Reed in July. Gregory Dwyer, the former BitMEX head of business development, has pleaded not guilty and will stand trial in October.
Arthur Hayes, Ben Delo, and Samuel Reed established BitMEX in 2014. Delo became the United Kingdom’s first Bitcoin billionaire in 2018. Former BitMEX CEO brought himself in to face Bank Secrecy Act accusations in the United States.
