Connect with us

Arthur Hayes

BitMEX’s Arthur Hayes pleads for leniency

Published

on

BitMEX’s Arthur Hayes pleads for leniency

U.S.› BitMEX › Legal

The defense counsel is arguing that the conviction of Arthur Hayes has set enough precedence within the crypto space.

2 min read

Updated: May 5, 2022 at 10:45 pm

Cover art/illustration via CryptoSlate

BitMEX co-founder, Arthur Hayes, is pleading for leniency as he awaits sentencing, with his lawyers asking for probation with community confinement or home detention, Bloomberg reports.

The former CEO pleaded guilty to violating the Bank Secrecy Act (BSA), including a letter from his mother in the documents sent to the judge who’ll sentence him.

Advertisement

Prosecutors first went after BitMEX in 2020 for violating the BSA and thereby making their exchange a haven for bad actors. 

The US Department of Justice claimed that

“As a result of its willful failure to implement [anti-money laundering] and [know-your-customer] programs, BitMEX was in effect a money-laundering platform.”

Beyond prosecuting the company itself, the DOJ also went after its founders, Arthur Hayes, Benjamin Delo, Gregory Dwyer, and Samuel Reed. The company itself chose to settle to $100 million in August 2021.

But Arthur Hayes, Benjamin Delo, and Samuel Redd finally settled in February, with the three admitting that they failed to establish an AML program at the exchange. The settlement required them to pay $10 million each.

In addition, the plea deal means that they are liable to a prison sentence ranging from 6 to 12 months under federal guidelines. Hayes’ lawyers, however, are trying to make sure he gets none.

Defense counsel says Hayes conviction sets precedence

In the 65-page submission asking for leniency, the defense counsels argued that his sentence in an emerging area had set a precedent for prosecuting financial crimes in cryptocurrency exchanges. This, they believe, is enough.

A part of the letter reads,

“This is a landmark case that has already had an extraordinary and well-publicized impact on Mr. Hayes’s personal life and the BitMEX business that he co-founded.”

The lawyers also argued that Hayes couldn’t be a repeat offender given that the founders are no longer with BitMEX. The submission also included letters from supporters.

The prosecution is yet to file its sentencing recommendation. If the judge grants Hayes’s plea for leniency, he’ll be able to leave the country and travel as he wishes. 

Hayes has recently been quite active in the crypto community, offering several opinions on the market. He recently predicted that Bitcoin could reach $1 million in an opinion piece and explained how this could happen.

Advertisement

Arthur Hayes

US Court Fines Bitmex’s Founders $30 Million For Operating Illegal Crypto Platform

Published

on

US Court Fines Bitmex’s Founders $30 Million For Operating Illegal Crypto Platform

The founders of Bitmex have been ordered to pay $30 million “for illegally operating a cryptocurrency derivatives trading platform and anti-money laundering violations.” Arthur Hayes, Benjamin Delo, and Samuel Reed must pay $10 million each.

Bitmex’s Founders Fined $30 Million

The Commodity Futures Trading Commission (CFTC) announced Thursday that the U.S. District Court for the Southern District of New York has ordered Bitmex’s founders to pay a total of $30 million dollars “for illegally operating a cryptocurrency derivatives trading platform and anti-money laundering violations.”

Noting that the three Bitmex co-founders are Arthur Hayes, Benjamin Delo, and Samuel Reed, the CFTC clarified:

The orders require each to pay a $10 million civil monetary penalty, and also enjoin Hayes, Delo, and Reed from further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.

The orders stem from a CFTC complaint filed in October 2020 against Bitmex and its three founders.

The CFTC resolved the action against Bitmex in August 2021 that “incorporated a $100 million civil monetary penalty and injunctions against future violations of the CEA and CFTC regulations,” the derivatives watchdog detailed.

The U.S. Attorney’s Office for the Southern District of New York also “indicted Hayes, Delo, Reed, and one other individual on charges of willfully causing Bitmex to violate the Bank Secrecy Act and conspiracy to commit that same offense,” the CFTC noted, elaborating:

Hayes, Delo, and Reed have entered guilty pleas to count one of the indictments against them.

The three are scheduled to be sentenced in the upcoming weeks, the derivatives regulator added.

What do you think about Bitmex’s co-founders having to pay $30 million? Let us know in the comments section below.

Advertisement

Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

Advertisement

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Continue Reading

Arthur Hayes

Bitmex Co-Founder Arthur Hayes Says Bitcoin Could Drop To $30K Amid A Stock Market Rout

Published

on

Bitmex Co-Founder Arthur Hayes Says Bitcoin Could Drop To $30K Amid A Stock Market Rout

The co-founder and former CEO of Bitmex, Arthur Hayes, has published a new blog post concerning the current state of cryptocurrency markets. Hayes says currently there’s an inability to recognize the cyclical nature of markets and the “inconvenient truth” that is crypto is now moving in “lockstep” with market equities. Hayes expects the Nasdaq 100 (NDX) to experience a significant 30% to 50% drawdown and leading crypto assets like bitcoin and ethereum to drop in value too, amid a great deal of stock market carnage.

While the Long Term Crypto Market Outlook Was Bright, Bitmex Co-Founder’s Short Term Perspective Is Scary

The crypto economy dropped under the $2 trillion mark on Monday, sliding 4.7% down to $1.98 trillion. The downturn is being attributed to the Federal Reserve’s expected rate hikes as economists believe the U.S. central bank is “expected to deliver two back-to-back half-point interest rate hikes in May and June,” according to a Reuters poll. The surveyed economists also predict the chance of a recession happening next year is 40%. Following a blog post published in mid-March, the co-founder of Bitmex Arthur Hayes has written some new predictions for the near term.

The last blog post on March 16 explained that Hayes believes the end of the “Petro Dollar / Euro Dollar monetary system” is drawing closer. Hayes also said that he predicted gold’s value could reach $10K per ounce while bitcoin (BTC) marches to $1 million per coin. However, the blog post published on April 10 paints a different picture, as Hayes is predicting a crypto market downturn. Via the blog post and sharing a great number of charts, Hayes shows that bitcoin (BTC) and crypto markets, in general, are very correlated at the moment.

Bitcoin vs. NDX 90-day correlation. Chart published in the blog post written by Arthur Hayes on April 10, 2022.

Hayes expects the Nasdaq 100 (NDX) to shudder and he believes crypto markets will follow in tandem. He speculates that the NDX will drop by roughly 30% or even as much as 50% lower but he’s not sure. Hayes is clear, however, that the Federal Reserve has put a stop to monetary easing practices and that time has ended. “[NDX] down 30%? … Down 50%? … your guess is as good as mine,” Hayes said on Sunday. “But let’s be clear – the Fed isn’t planning to grow its balance sheet again any time soon, meaning equities ain’t going any higher,” the Bitmex co-founder added.

Crypto Derivatives Exchange Co-Founder’s Predictions: Bitcoin $30,000, Ethereum $2,500

Hayes thinks that the crypto economy will follow suit with U.S. technology stocks and will drop significantly lower in value in the coming months. The crypto derivatives exchange co-founder highlights that there are “many crypto market pundits who believe the worst is over” but he believes they “ignore the inconvenient truth.” While Hayes predicts the NDX will slide by 30% or even 50% lower, he predicts bitcoin (BTC) will drop to $30K per unit. Hayes also expects the second leading crypto asset, ethereum (ETH), to slide to $2,500 per unit. The numbers Hayes came up with stem from what he believes and not from a technical analysis standpoint.

“There isn’t much science to these numbers other than a gut feeling,” Hayes writes. “The annoying part is that there are a number of altcoins I have begun to accumulate because the prices are quite attractive. Even though some of these coins are already down 75% from their all-time high, I don’t believe even they can escape the coming crypto carnage. As such, I am buying crash June 2022 puts on both bitcoin and ether.”

Hayes ends his blog post by saying that of course, his “market prognosis might be wrong” and he is fine with that. If he is wrong then he only loses the premium he paid on crash protection. “I will be wrong if the correlation between bitcoin / ether and NDX starts dropping before a crash in risk asset markets,” Hayes’s blog post concludes. “I’m perfectly okay with that outcome, as I’m already in a long crypto position.”

Tags in this story

Arthur Hayes, Bitcoin, Bitcoin (BTC), bitcoin $1 million, BitMex, Bitmex Co-Founder, BTC $30K, China, correlation, economics, Economy, ETH $2500, EU, Euro Dollar, Frozen Gold, gold, Gold $10K, Hayes, Monetary System, Nasdaq 100, NDX, petro dollar, Petro Dollar Wars, Russia Ukraine war, US, West

Advertisement

What do you think about the crypto market predictions from the Bitmex co-founder’s recent blog post? Let us know what you think about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

Advertisement

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Continue Reading

Anton Siluanov

Co-Founder Of Bitmex Predicts Gold Rising To $10K, Bitcoin Marching To $1 Million

Published

on

By

Co-Founder Of Bitmex Predicts Gold Rising To $10K, Bitcoin Marching To $1 Million

On March 16, Arthur Hayes, the co-founder of the cryptocurrency exchange Bitmex, published a blog post called “Energy Cancelled,” which describes the economics behind the ongoing Russia-Ukraine war. Hayes explains in his 26-minute long opinion piece that historians may point to February 26, 2022, as the time in history when the “Petro Dollar / Euro Dollar monetary system” ended.

Speculation Concerning an Independent International Monetary and Financial System Free From the Petro Dollar and Euro Dollar Monetary System

There’s been a lot of economic calamity since the start of the Russia-Ukraine conflict, as financial conditions worldwide have tightened and Russia has been sanctioned by a large swathe of countries. Analysts and economists believe the war and sanctions could have negative effects on the global economy and on March 5, the International Monetary Fund (IMF) warned the “economic consequences are already very serious.” A few days after the IMF warning, U.S. lawmakers introduced a bill that sanctions Russia’s gold reserves.

Reports indicated on March 13, that the Russian Federation finance minister, Anton Siluanov, explained that half of the country’s gold and foreign reserves were frozen. “This is about half of these reserves that we had. We have a total amount of reserves of about $640 bln,” Siluanov said. “Currently, we cannot use about $300 billion of these reserves,” the Russian finance minister added.

Siluanov’s statements have led to speculation concerning an independent international monetary and financial system between the Eurasian Economic Union (EAEU) and China. Moreover, a great deal of vagueness and confusion concerning the Russian’s frozen gold. The journalist Pepe Escobar highlights in his report called “Say hello to Russian gold and Chinese petroyuan,” that there is a mystery to be solved. “Where is that frozen Russian gold?” Escobar’s report asks.

Bitmex Co-Founder Arthur Hayes Outlines the Consequences Tied to Canceling the World’s Largest Energy Exporter

Meanwhile, the co-founder of the cryptocurrency exchange Bitmex, Arthur Hayes, published a blog post on March 16, that touches upon canceling the world’s largest energy exporter and the end of the “Petro Dollar / Euro Dollar monetary system”

What happens when you “cancel” the world’s largest energy producer … ? “Energy Cancelled” is an essay on why the post-1971 Petro / Eurodollar regime died on 26 February 2022. Are you ready for $1 million #Bitcoin and $10,000 #Gold?https://t.co/EttRAmPPS9 pic.twitter.com/LOSqaseq3N

— Arthur Hayes (@CryptoHayes) March 16, 2022

The blog post written by Hayes is extremely long, but comprehensive and filled with sourced data. Hayes stresses that historians will likely call February 26, 2022, as the end of the monetary system controlled by the “Petro Dollar” and “Euro Dollar.”

Furthermore, Hayes believes a financial crisis will take place and it will stretch across every aspect of the financial system worldwide. “I am 100% certain that there will be a financial crisis of epic proportions predicated on losses faced by commodity producers and traders who touch every aspect of the globalised financial system,” the Bitmex co-founder’s blog post explains. Hayes added:

Advertisement

You cannot remove the world’s largest energy producer — and the collateral these commodity resources represent — from the financial system without serious unimagined and unintended consequences.

Vulnerabilities Tethered to Centralized, Permissioned Digital Networks

The blog post written by the Bitmex co-founder details how the U.S. and the dollar became a dominant force in the world of finance. At one time America was dominant in industrial and manufacturing businesses, but Hayes says these days “America exports finance, not goods, to the world on a macro scale.”

Hayes also talked about fiat currencies and how humans have devised ways to send “value electronically over centralised permissioned digital networks.” While the SWIFT payments network is operated by a number of countries, Hayes insists SWIFT is “effectively controlled by the U.S. and EU.”

Hayes explains that there are vulnerabilities when a ruling nation “decides to block access to the network to any participants.” He says that the point begs the question: “Should you ‘save’ in assets that ride on this centralised, permissioned digital monetary network?” The blog post highlights that there’s a level of trust given that a nation state will not “expropriate your ‘savings.’” The Bitmex founder’s blog post adds:

Remember this, you own nothing, you merely ‘rent’ your net worth both as an individual or sovereign from the entity that operates the centralised, permissioned fiat digital monetary network.

Hayes Believes if Gold Marches Its Way Above $10K, Bitcoin Will March Its Way to a Million

Further into the blog post, Hayes says that he believes gold will “phase shift” a great deal higher than the price is today. He believes competition and demand “will push the marginal last price well north of $10,000, and we could see stupendous prices for gold that seems unfathomable.”

Gold jumping to $10K per ounce or higher will “psychologically shock” the world’s asset markets, Hayes notes. Hayes wholeheartedly believes that most hard assets that people use to hedge will skyrocket in value and this includes bitcoin (BTC).

“As gold marches its way above $10,000, bitcoin will march its way to $1,000,000. The bear market in fiat currencies will trigger the largest wealth transfer the world has ever seen,” Hayes explains. He adds that he believes both gold and bitcoin are forms of hard money assets. “Both are hard money, one is analog (gold) one is digital (bitcoin),” Hayes writes.

Toward the end of the Bitmex executive’s blog post, he describes the pros and cons tied to storing wealth in gold and how it can be cumbersome to store. “Most readers don’t have a vault in a freeport in which to store their yellow pet rocks — Instead, you would like a more transportable hard store of wealth,” Hayes says.

Hayes finishes his blog post by repeating that “you cannot cancel the largest energy producer from a monetary system without massive repercussions.” He deduces after the fog of war is dispersed, the economy will “present a situation where hard money instruments rule all of global trade.”

Tags in this story

Anton Siluanov, Arthur Hayes, Bitcoin, Bitcoin (BTC), bitcoin $1 million, BitMex, Bitmex Co-Founder, China, economics, Economy, EU, Euro Dollar, Frozen Gold, gold, Gold $10K, Hayes, IMF, Monetary System, Pepe Escobar, petro dollar, Petro Dollar Wars, Russia, Russia Ukraine war, Russian Federation finance minister, Sanctions, Swift, US, West

What do you think about the recent blog post published by the Bitmex founder Arthur Hayes? Let us know what you think about this subject in the comments section below.

Advertisement

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

Advertisement

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Continue Reading

Trending