After pleading guilty to anti-money laundering charges, US authorities believe Arthur Hayes, the co-founder of BitMEX, should be sentenced to more than a year in prison. Mr. Hayes agreed to a plea agreement that calls for 6 to 12 months in prison.
Early in February, BitMEX’s co-founder accepted a plea agreement
Prosecutors in the United States have been pushing for a lengthier sentence for Arthur Hayes. In addition, the SEC launched an inquiry against many key officials at the Bitmex exchange platform in October 2020 for failing to follow basic AML procedures.
One of the co-founders, Arthur Hayes, pled guilty to violating the US Bank Secrecy Act earlier this year. Among the other co-founders, Benjamin Delo and Samuel Reed pled guilty and agreed to pay a $10 million fine, each reflecting “pecuniary benefit gained from the conduct.”
If Hayes had gone to trial, he would have been sentenced to five years in prison. However, as part of the plea agreement, prosecutors agreed that he should serve 6 to 12 months in prison, according to federal sentence guidelines.
The prosecutor is requesting a lengthier sentence
Hayes urged that the court sentence him to 6 to 12 months of probation, which would allow him to travel freely. His attorneys claimed that he is unlikely to make the same error again, citing a letter from his mother as evidence. The probation agency even suggested a two-year sentence.
While the probation office and Hayes’ attorneys wanted a probationary sentence, prosecutors have subsequently demanded at least a one-year prison sentence. The prosecutor who defended the SEC’s case stated that the case has been “very widely observed” in the Bitcoin industry. Compliance by bitcoin platforms will be impossible if their operators feel there are no significant consequences for breaking the law.
The remark implies that the SEC intends to exploit the Hayes case to frighten the creators of other crypto projects. Hayes and his co-defendants, according to the authorities, failed to prevent the exchange from becoming a money-laundering pool and so are guilty of serious charges that warrant at least a year in prison.
Prosecutors even claim that choosing Seychelles as the headquarters was a deliberate attempt to dodge regulatory oversight. Finally, prosecutors argue that the $10 million financial fine and six months of probation are insufficient punishments.
The SEC has made the lawsuit affecting Mr. Hayes’ life public for over 18 months. Hayes has been publicly harassed by the SEC to frighten others.
Other cases relating to BitMEX
Other allegations were brought against BitMEX, and the exchange agreed to pay a $100 fee. Delo and Reed, two other BitMEX co-founders, will get their sentences on June 15 and July 13, respectively. One of the exchange’s founding workers faces charges and will go to trial in October.