Monday, January 30, 2023

Arthur Hayes to serve 2-year probation owning up to BitMEX’s AML mishap


Bringing closure to the long-awaited judgment associated to the cash laundering actions over the BitMEX crypto alternate, one of many 4 federal district courthouses in New York reportedly sentenced two-year probation and 6 months of residence detention to founder and ex-CEO Arthur Hayes.

Arthur Hayes, together with the opposite BitMEX co-founders — Benjamin Delo and Samuel Reed — and the corporate’s first non-employee Gregory Dwyer, pleaded guilty to the Bank Secrecy Act (BSA) violations on Feb 24, admitting to “willfully failing to establish, implement and maintain an Anti-Money Laundering (AML) program at BitMEX.”

Indictment towards BitMEX co-founders and workers for violating BSA. Source: Justice.gov

Pleading responsible to supporting cash laundering is a punishable offense, typically carrying a most penalty of 5 years jail time. However, each Hayes and Delo made their responsible pleas forward of the March trial date and had agreed to pay $10 million in prison fines every.

On April 7, Cointelegraph reported that Hayes voluntarily surrendered to US authorities in Hawaii six months after federal prosecutors first levied fees, to which his attorneys acknowledged:

“Mr. Hayes voluntarily appeared in court and looks forward to fighting these unwarranted charges.”

According to the indictment, public courtroom filings, and statements made in courtroom, Hayes was launched after posting a $10-million bail bond pending future proceedings in New York. However, prosecutors from the Office’s Money Laundering and Transnational Criminal Enterprises Unit discovered the entrepreneurs to be responsible of not implementing AML safeguards, together with not fulfilling know-your-customer (KYC) obligations.

Despite the approaching chance of serving jail time, owning up to the allegations resulted in Hayes being sentenced to a house confinement sentence that requires him to spend the primary six months of his sentence from residence. In addition, he additionally agreed to pay a wonderful of $10 million.

Related: Blockchain and crypto can be a boon for tracking financial crimes

Busting the parable associated to the convenience of laundering cash utilizing crypto, a brand new evaluation highlights the potential of blockchain know-how and crypto to observe down monetary crimes.

While quite a few initiatives inside the crypto ecosystem had been victims of focused assaults, dangerous actors proceed to wrestle when it comes to cashing out the stolen funds.

Speaking to Cointelegraph, Dmytro Volkov, chief know-how officer at crypto alternate CEX.IO, mentioned that the notion of crypto being primarily utilized by criminals is outdated, including:

“In the case of Bitcoin (BTC), whose blockchain ledger is publicly available, a serious exchange with a competent analytics team can easily monitor and thwart hackers and launderers before the damage is done.”