Arthur Hayes, the co-founder and ex-CEO of the cryptocurrency exchange BitMEX, is asking a Manhattan federal judge for a sentence without jail time.
According to a Bloomberg report on Thursday, Hayes’ legal representatives filed a request for probation “with no home detention or community confinement” following a plea deal that will likely see him face a jail term of six to 12 months “under federal guidelines.”
“This is a landmark case that has already had an extraordinary and well-publicized impact on Mr. Hayes’s personal life and on the BitMEX business that he co-founded,” reads the 65-page submission.
BitMEX Co-Founder Pleads Guilty to Violating Bank Secrecy Act
Samuel Reed, one of three BitMEX co-founders including Arthur Hayes and Benjamin Delo, has pleaded guilty to violating the United States’ Bank Secrecy Act. The BitMEX co-founder pled guilty to one count of violating the Bank Secrecy Act, which means he is now facing a maximum sentence of five years in prison. “Samuel Reed has now joined his co-founders, Arthur Hayes and Benjamin Delo, in admitting that they caused BitMEX to commit criminal violations of the anti-money laundering laws that gover...
Hayes surrendered to U.S. authorities to face trial in April last year before being released on $10 million bail as part of a pre-arranged deal with the prosecutors.
Along with BitMEX co-founders Benjamin Delo and Samuel Reed, Hayes pleaded guilty to violating the Bank Secrecy Act earlier this year after admitting he failed to establish and maintain an anti-money-laundering program at the exchange.
All three of them agreed to pay a fine of $10 million.
Per Bloomberg, in a bid for leniency, Hayes’ legal team also provided the court with a letter from his mother, as well as photographs and letters from supporters.
Aside from that, the lawyers argued that Hayes’ conviction in the emerging area of finance and markets is a precedent the United States can use in the prosecution of financial crimes at cryptocurrency exchanges globally, adding that he is “unlikely to be a repeat offender.”
The court’s verdict is due later this month, however, to date, the government hasn’t filed a sentencing recommendation.
BitMEX’s bumpy past
Founded in 2014, BitMEX was once one of the biggest crypto trading platforms and one of the first to offer derivatives products, such as futures contracts.
BitMEX fell under intense regulatory scrutiny in 2019, with the Commodity Futures Trading Commission (CFTC) and the Financial Crimes Enforcement Network (FinCEN) charging the exchange with intentionally evading U.S. laws.
The case was settled in August 2021 after BitMEX agreed to pay $100 million to resolve the charges.
CEO of Germany's Second-Largest Exchange Will Soon Run BitMEX
Alexander Höptner, the former executive of Germany’s second-largest stock exchange, Börse Stuttgart, has been appointed by holding group 100x Group to lead its various products and investments, as per an announcement. He will join in January 2021. The group operates crypto derivatives exchange BitMEX, whose three founding members—Arthur Hayes, Samuel Reed, and Ben Delo—stepped down in October after facing multiple charges in the US. We are proud to introduce Alexander Höptner as our newly appoi...
Prior to that, 100x, the holding group for BitMEX’s parent company, appointed Alexander Höptner, the former executive of Germany’s second-largest stock exchange, Börse Stuttgart, as a new chief executive officer.
In January, BXM Operations AG, a company established by Höptner and BitMEX’s CFO Stephan Lutz, announced plans to purchase Bankhaus von der Heydt, a 268-year-old German bank.
However, according to reports from German media in March, the deal fell through.
