BitMEX co-founder and former CEO Arthur Hayes has avoided serving actual prison time for violating the U.S. Bank Secrecy Act after pleading guilty to the charges. Instead, the first Black crypto billionaire and innovator will serve six months of house arrest, two years of probation and pay a $10 million dollar fine.
Hayes, 36, along with his other co-founders Benjamin Delo and Samuel Reed, and executive Gregory Dwyer, were accused of “willfully failing to establish, implement, and maintain an anti-money laundering (“AML”) program at BitMEX.”
The quartet also failed to establish a “Know Your Customer” (KYC) program after being informed of suspicious activity on the platform, federal authorities said.
In layman’s terms, the BitMEX leaders were accused of intentionally supporting money laundering and they all eventually pled guilty to the charges, Coin Telegraph reported.
The U.S. Department of Justice (DOJ) issued a news release about Hayes’ sentencing. “While building a cryptocurrency platform that profited him millions of dollars, Arthur Hayes willfully defied U.S. law that requires businesses to do their part to help in preventing crime and corruption,” U.S. Attorney Damian Williams said in the release. “
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“He intentionally failed to implement and maintain even basic anti-money laundering policies, which allowed BitMEX to operate as a platform in the shadows of the financial markets,” Williams continued. “This Office will continue to vigorously enforce United States law intended to prevent money laundering through financial institutions, including cryptocurrency platforms.”
BitMEX, which stands for Bitcoin Mercantile Exchange, was founded in 2014 and quickly rose to prominence as one of the largest platforms in the crypto industry.
The feds and Commodity Futures Trading Commission first began their investigation of Hayes in 2019.
Two years later, Hayes surrendered to U.S. authorities in April 2021 in Hawaii. At the time his lawyers said, “Mr. Hayes voluntarily appeared in court and looks forward to fighting these unwarranted charges.”
Some on social media also saw Hayes’ arrest as another example of the double standard between white and Black founders and big banks.
“Fascinating tale of BitMEX, a Bitcoin exchange which was founded by and created [the] first Black crypto billionaire. Founders are facing criminal charges for not doing enough to stop money laundering. A double standard as banks are fined not arrested for this,” Twitter user Victor Obasanjo wrote.
A current resident of Miami, Florida, Hayes will serve his 6-month house arrest sentence out there. Delo and Reed have also been ordered to pay a $10 million dollar fine and are awaiting sentencing.
PHOTO: BitMEX co-founder and former CEO Arthur Hayes. Photographer: Bloomberg / Getty