Former BitMEX CEO asks for probation over jail time ahead of court sentencing

Former BitMEX CEO Arthur Hayes is seeking probation with the ability to travel and reside abroad rather than serving jail time.

Hayes pleaded guilty to violating the US Bank Secrecy Act (BSA) in February after a two-year legal battle with the US government. Hayes and his co-founders were accused of "evading US anti-money laundering requirements" in October 2020. The penalty carries a maximum penalty of five years in prison.

But Hayes is looking to avoid any prison time. In a letter from his counsel to Judge John G. Koeltl ahead of his May 18 sentencing hearing, Hayes is asking for probation and the ability to travel and live abroad, rather than serving time in a state facility or under home detention. 

The letter indicates that Hayes agrees with the view that crypto firms should be subject to BSA regulations:

"Mr. Hayes stands before this Court having accepted responsibility for his criminal conduct, which he deeply regrets. In this first-of-its-kind prosecution, the government has achieved a notable success by establishing the principle that cryptocurrency derivatives trading platforms must comply with the Bank Secrecy Act if they provide services to US customers. Mr. Hayes understands and endorses the principle that compliance with the BSA is not only legally required, but also that it serves important societal and law enforcement objectives, especially as cryptocurrency continues to mature as an asset class and as a medium of exchange."

Hayes is seeking the ability to travel abroad so that he can return to his home in Asia, in addition to another reason that was redacted from the court filing. 

The letter argues that Hayes' criminal activity was consistent with industry practice at the time and committed without clear guidance from regulators. It also did not actively or knowingly facilitate other criminal activity as the Silk Road marketplace did.

The letter also points out that Hayes has no prior offenses and is already paying a financial penalty well over the usual scope for this type of offense. 

As a character argument, the letter claims Hayes seeks to contribute positively to the cryptocurrency community and acts as a thought leader in the space. Indeed, Hayes has continued to update his blog, most recently with his prediction of a "coming crypto carnage."

Hayes Sentencing Letter by MichaelPatrickMcSweeney on Scribd

About Author

Aislinn Keely joined The Block in the summer of 2019. She is a member of the outlet's policy team, holding down the legal beat. Before The Block, she lent her voice to the NPR affiliate WFUV, where she reported and anchored newscasts in addition to some podcast work. Aislinn is a proud Fordham Ram and editor-in-chief emerita of its newspaper. When she isn't writing or reporting, Aislinn is running and rock climbing.