Key points to remember
- US prosecutors have suggested that BitMEX co-founder Arthur Hayes could face more than a year in prison.
- Hayes’ actions would previously have been punishable by six to 12 months in prison following his guilty plea in February.
- Prosecutors said compliance in the crypto industry cannot be achieved without “meaningful repercussions.”
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US prosecutors have suggested that BitMEX co-founder Arthur Hayes should spend more than a year in jail, according to reports.
Hayes could receive a longer sentence
Prosecutors are seeking additional jail time for BitMEX co-founder Arthur Hayes.
Hayes, along with two other co-founders, pleaded guilty to violating the US Bank Secrecy Act (BSA) in February. Today, Bloomberg reported that federal prosecutors have sent their recommendation for sentencing to the judge assigned to the case.
In Hayes’ plea deal, prosecutors initially agreed that his actions merited six to 12 months in prison as well as a $10 million fine. However, those prosecutors are now arguing for a longer sentence, a move they say is justified by the need to set a tougher example for the rest of the cryptocurrency industry.
Prosecutors said fuller compliance in the crypto industry will fail if exchange operators “believe there are no meaningful repercussions for breaking the law.”
In a probation application last week, Hayes and his attorneys asked that Hayes not receive any jail time and be allowed to travel freely on the grounds that he was unlikely to be a repeat offender.
Hayes co-founders Benjamin Delo and Samuel Reed pleaded guilty alongside Hayes in February. They are to be sentenced on June 15 and July 13 respectively.
BitMEX continues to work
BitMEX was initially accused of failing to implement anti-money laundering (AML) programs last year. In August, the companies that own the exchange paid $100 million in penalties as part of a settlement with the CFTC and FinCEN.
The exchange remains active. It is the 16th largest crypto derivatives exchange, with a 24-hour open interest of $983 million.
Founded in 2014, BitMEX is notable for being one of the first Bitcoin derivatives exchanges, although it has since been overtaken in popularity by competing exchanges.
Disclosure: At the time of writing this article, the author of this article owned BTC, ETH, and other cryptocurrencies.