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According to US prosecutors, the Co-Founder of the cryptocurrency exchange BitMEX – Arthur Hayes – should stay behind bars for more than 12 months because his company violated anti-money laundering laws. It is expected that the court will sentence him to spend between six months and one year in federal prison since he pleaded guilty to breaching the Bank Secrecy Act in February.
One Year is Is Not Enough
The digital asset exchange and derivative trading platform – BitMEX – made the headlines in October 2020 when the Commodity Futures Trading Commission (CFTC) accused the Co-Founders Arthur Hayes, Benjamin Delo, and Samuel Reed of failing to establish and maintain an AML program. The prosecutors argued that the executives’ actions turned the trading venue into a “money-laundering platform.”
The following lawsuits led to a financial penalty of $100 million imposed on BitMEX, while the Co-Founders stepped down.
In February this year, Hayes pleaded guilty to the charges brought against him, which could grant him a reduced prison sentence of six to 12 months. Additionally, he agreed to pay a $10 million fine.
However, US prosecutors opined that this punishment does not seem harsh enough. Keeping in mind the violations he did, Hayes deserves to be in federal prison for over one year, they added:
“There is no question that this case has been extremely closely watched in the cryptocurrency industry. Compliance by cryptocurrency platforms will be unattainable if their operators believe there are no meaningful repercussions for failing to comply with the law.”
For their part, Hayes’ lawyers insisted that their client should not see the prison cell from the inside and allow him to travel abroad freely. They argued that this case is a turning point for future violations and will help the US government solve monetary crimes related to crypto platforms.
The Probation Office also believes Hayes should not go to prison, recommending two-year probation.
The Other Co-Founders Are Not Safe
Benjamin Delo and Samuel Reed were also slammed with financial penalties for BitMEX’s law violations. Earlier this month, the CFTC ordered them to pay $10 million fines each.
In addition, their court sentencings are set for June 15 (Delo) and July 13 (Reed) as it remains unknown whether they will face prison time, probation, or further monetary sanctions.
Featured Image Courtesy of VanityFair