BitMEX Former CEO Arthur Hayes Turns Himself in After Bank Secrecy Act Violation Charge

Arthur Hayes, the co-founder and former CEO of BitMEX Derivative Exchange, together with two other co-founders Samuel Reed and Benjamin Delo as well as their first employee Gregory Dwyer, were accused of violating the federal bank secrecy act as well as conspiring to violate the law.

On Tuesday, BitMEX CEO appeared before the federal court in Honolulu according to reports, and pending the future court proceedings was allowed to go home on a $10 million bond. 

The US Commodities Future Trading Commission (CFTC) has over a couple of years subjected the cryptocurrency exchanges under critical scrutiny with the likes of Coinbase and Binance having their fair share of the probe. 

The introduction of the crypto futures that gives an option for investors to make a highly leveraged investment made BitMEX one of the largest cryptocurrency derivatives exchanges around. While the prosecutors hold a charge sheet against Hayes for crime, his lawyer believes that Hayes voluntarily appeared at the court and he is ready for this legal battle as he is not guilty of the crime he is being accused of. 

Concerning the other accused, Reed was arrested In Massachusetts immediately after the charges were announced. In March, Delo voluntarily turned himself in according to the report, and both pleaded not guilty to the charges leveled against them. Dwyer’s lawyer also states that they have been in touch with the government and informed them about his whereabouts. He has also revealed his intention of clearing himself of those charges. 

CFTC has clearly stated to the exchanges the necessary procedure to follow before accepting US customers. The most obvious step is to register with the CFTC and ensure that perfect measures are put in place to prevent the platform being used for money laundering. In 2019, the CFTC started investigating BitMEX of which it was discovered that some of the exchange executives had deliberately evaded the compliance programs and proudly boasted about flouting the rules. 

According to the prosecutor, Hayes was found to have said he deliberately based the BitMEX exchange in Seychelles in an attempt to evade regulatory scrutiny. After the charges were announced, all the accused executives stepped down from their roles and appointed replacements though Hayes has been actively updating about the company on his medium page and BitMEX’s blog. 

Reed, Hayes, and Delo were all charged with one count of violating the Bank secrecy act and another count of conspiring to violate the act. 

Cryptocurrency has been largely criticized as being a tool for money laundering, and regulators feel the best way to handle it is to regulate the exchanges that host a lot of the users. Despite the stiff scrutiny, many succeed in using these platforms to launder money with some of the operators of the platforms being found guilty in this act.