Finally bringing closure to the long-awaited judgment regarding the failure to implement an anti-money laundering (AML) program at BitMEX, one of the four federal district courthouses in NYC sentenced six months of house arrest along with local monitoring and two years of probation to founder and former BitMEX CEO Arthur Hayes.
Back on February 24, Arthur Hayes, along with the other BitMEX co-founders Benjamin Delo and Samuel Reed, and the firm’s first non-employee Gregory Dwyer, pleaded guilty to the Bank Secrecy Act (BSA). During the hearing, they admitted to “failing to establish, deploy, and oversee an AML program at BitMEX.” Pleading guilty to corporate monetary fraud is punishable by law, often carrying a penalty of five years in jail. In any case, both Hayes and Delo admitted to being guilty at the end of the March trial and had agreed to pay a sum amount of $10 million in penalty charges each.
A report released by Cointelegraph on April 7 reported that Hayes voluntarily handed himself over to the U.S. officials in Hawaii, six months after the Feds claimed a lawsuit. His lawyers said, “Mr. Hayes willingly appeared in the court and looks forward to erasing these charges.”
Digging Deeper Into the Money Laundering Case
The BitMEX case against the three co-founders and Gregory Dwyer is first-of-its-kind persecution for the U.S. feds. Hayes has been given 30 days to decide from where in the U.S. he decides to serve his house arrest. After being a long-time resident of Singapore (14 years), Hayes recently purchased a real estate property in Miami. However, his lawyer insisted that since Hayes didn’t have a community in Floria, he might choose to serve his house detention elsewhere.
With more than two dozen friends and family members in the courtroom, including his mother, wife, and brother, Hayes said that he took “full responsibility” for his actions.
He mentioned, “I deeply regret my participation in this criminal activity. My best years are yet to come and I am ready to close the chapter and restart another chapter. I ask that you allow me to return home, deeply apologetic, and be able to restart another chapter of my life.”
As per the statements, lawsuits, and indictments made in the courtroom, Hayes was released after paying the $10 million penalty charges in New York. In any case, prosecutors from the Money Laundering office and Transnational Criminal Enterprises Unit found Hayes and the other co-founders to be guilty of not deploying the AML protocols, including not fulfilling KYC safeguards.
Shutting down the unwarranted charges related to the ease of laundering money through digital assets, a new report mentioned the potential of the underlying blockchain technology and crypto to identify financial crimes. While several companies in the cryptocurrency community were victims of cyber and financial crimes, cybercriminals continue to struggle when it comes to taking out crypto funds in fiat money.
In a statement released to Cointelegraph, Dmytro Volkov, chief technology officer (CTO) at crypto platform CEX.IO, said that the idea of digital currencies being only used by criminals is obsolete, adding: “Consider the largest crypto Bitcoin (BTC) with a publicly available blockchain ledger, which is a serious exchange with a highly specialized analytics team. The team at Bitcoin can easily monitor and prevent bad actors and money launderers before they can do any damage.”
