BitMEX founder Arthur Hayes gets 6 months detention for failing to meet AML and KYC requirements

BitMEX founder Arthur Hayes has been sentenced to 6 months of home detention for violations bordering AML and KYC requirements on the derivatives exchange. The U.S Department of Justice (DOJ) confirmed that Hayes has also been sentenced to 2 years of probation for the same offence. In addition, he is to pay a fine of $10 million.

Details of the ruling shared with the DOJ state that the founder “failed to establish, implement, and maintain an anti-money laundering program “ on BitMEX. 

The futures derivatives trading platform allows users to trade crypto derivatives with up to 100x leverage. This significantly amplifies their gains but also their losses, making it a very risky platform. 

Apart from this risk, cryptocurrencies are generally considered by regulators to be a tool for money laundering and therefore emphasize the need for AML control measures. This includes KYC requirements and failure to implement it constitutes a violation. Commenting on the case, U.S attorney, Damian Williams said:

“While building a crypto platform that profited him millions of dollars, Arthur Hayes willfully defied U.S. law that requires businesses to do their part to help in preventing crime and corruption. He intentionally failed to implement and maintain even basic anti-money laundering policies, which allowed BitMEX to operate as a platform in the shadows of the financial markets. This Office will continue to vigorously enforce United States law intended to prevent money laundering through financial institutions, including cryptocurrency platforms.”

Hayes is also said to have violated the Bank Secrecy Act which requires exchanges like BiMEX to report suspicious activities, of which 600 transactions were not reported. Co-founders of BitMEX, Benjamin Delo and Sam Reed have both pleaded guilty and will also be sentenced at a later date.

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