BitMEX founder Arthur Hayes avoids jail time, sentenced to six months of home detention

Arthur Hayes, one of the founders of crypto exchange BitMEX, avoided jail time Friday during his sentencing hearing in New York.

Judge John Koeltl handed Hayes a sentence of six months of home detention as part of a two-year probationary period. He had previously pleaded guilty to violating the US Bank Secrecy Act (BSA).

"I'm ready to turn the page," the 36-year-old Hayes told the court. His attorney spoke extensively about his character attestations and volunteer work prior to the founding of BitMEX. A representative for Hayes declined to comment following the hearing's conclusion.

The prosecution had asked for sentencing above the 6-12 months of jailtime that normal guidelines recommend. 

“Hayes profited greatly from BitMEX, personally earning over one hundred million dollars, while willfully and continuously operating the Company in violation of the BSA, by failing to implement an anti-money laundering ("AML") program,” the prosecution wrote in a May 9 letter to the court.

"There were real consequences to this offence," an attorney for the US government said during the hearing. "The defendent advertised its lack of AML or KYC."

Hayes, for his part, had asked the court to give him probation with the option to travel in the lead up to sentencing. When the DOJ unveiled its initial case, Hayes, an American national, was living in Singapore. From there, his legal team negotiated his return to the US. 

Hayes’s case has been the subject of enormous interest from the crypto industry since the Commodity Futures Trading Commission and Department of Justice filed joint civil and criminal enforcement actions against BitMEX and its executives near the end of 2020. Fellow founders of BitMEX Ben Delo and Samuel Reed have pleaded guilty as well.

Delo and Reed, alongside several members of Hayes' family and many more supporters, were present in the courtroom. A standard condition of probation restricts Hayes from communicating with known felons, a condition Judge Koeltl waived in the case of Hayes, Delo and Reed, who still serve together on the board of BitMEX's parent company. 

The judge also will allow Hayes to travel following the six months of home detention in the US, allowing him to return to Singapore for the remainder of his probation. 

About Author

Kollen Post is a senior reporter at The Block, covering all things policy and geopolitics from Washington, DC. That includes legislation and regulation, securities law and money laundering, cyber warfare, corruption, CBDCs, and blockchain’s role in the developing world. He speaks Russian and Arabic. You can send him leads at [email protected]