Arthur Hayes, founder and former CEO of cryptocurrency exchange platform BitMEX, has been sentenced to two years of probation for the lack of anti-money laundering controls on the platform. The defendant pleaded guilty to multiple violations of the US Bank Secrecy Act (BSA) in federal court in New York.
Damian Williams, a U.S. attorney, says, “While building a cryptocurrency platform that brought him millions of dollars, Hayes deliberately defied U.S. law that requires businesses to do their part to help prevent crime and corruption.” Prosecutors say BitMex intentionally avoided implementing basic anti-money laundering policies, which would have benefited some criminal groups.
In 2020, the U.S. government officially indicted Hayes and two BitMEX co-founders. In early 2022, the three individuals pleaded guilty to violating the BSA, which helped deliberately maintain a complex money laundering structure.
In the complaint, it is mentioned that Hayes and his collaborators never filed suspicious activity reports, as stated in the BSA. In an example presented by the prosecution, it describes how BitMEX helped clean up funds obtained through a cryptocurrency theft campaign.
Like other similar platforms, BitMEX was required to maintain strong anti-money laundering policies as it provided services to U.S. residents. Although the platform announced its exit from the US market in 2015, trying to avoid its responsibilities, the prosecution assures that this was only a charade, since the company enabled a careless access control and its customers in the U.S. were able to continue using the service.
Although Hayes faced a sentence of between six and 12 months in prison, the Probation Department recommended a sentence of one year of house arrest, followed by one year on probation. The prosecution refused to accept this recommendation, as they wanted to use Hayes and his accomplices as an example for other cryptocurrency exchange operators; however, the judge in charge of the case ordered probation.
Hayes and one of the defendants will pay a $10 million fine, plus BitMEX agreed to publicly acknowledge its lack of commitment to anti-corruption controls.
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