The co-founder and former CEO of cryptocurrency exchange BitMEX was sentenced to six months in house arrest after pleading guilty to violating the US Bank Secrecy Act, according to US prosecutors.
Following his house arrest for failing to establish an anti-money laundering program at BitMEX, which he founded with Benjamin Delo and Samuel Reed in 2014, Arthur Hayes, 36, will also pay a $10 million fine and serve two years of probation.
On Friday, Hayes was sentenced in federal court in Manhattan.
“While building a cryptocurrency platform that profited him millions of dollars, Arthur Hayes willfully defied US law that requires businesses to do their part to help in preventing crime and corruption,” Damian Williams, the top federal prosecutor in Manhattan, said in a statement.
Prosecutors sought a “significant” prison term, claiming that a $10 million fine would not deter other cryptocurrency companies from similar behavior.
Hayes’ attorneys had asked for probation rather than home detention. Hayes’ spokesperson declined to comment on the sentence.
Delo and Reed pleaded guilty and are awaiting sentencing.
In 2020, the three were charged with failing to implement a “know your customer” requirement mandated by federal law.
Prosecutors stated that BitMEX was “essentially a money-laundering platform,” and Hayes did nothing after learning in 2018 that BitMEX was being used to launder proceeds from a cryptocurrency hack.
BitMEX agreed to pay up to $100 million to settle separate charges of illegally accepting customer funds to trade cryptocurrency without being registered and failing to conduct customer due diligence last year.
To read our blog on “Affecting Beeple’s Twitter account a hacker steals $438K in crypto & NFTs,” click here.
