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

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Bringing an end to the long-awaited lawsuit over money laundering activities over the BitMEX cryptocurrency exchange, one of the four federal district courts in New York has reportedly sentenced a two-year probation and six months of house arrest to founder and former CEO Arthur Hayes. .

Arthur Hayes, along with the other BitMEX co-founders – Benjamin Delo and Samuel Reed – and Gregory Dwyer’s first non-employee, pleaded guilty to violating the Bank Secrecy Act (BSA) on February 24, confessing to “willfully fail to establish, implement, and maintain the Anti-Money Laundering (AML) program on BitMEX.”

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Prosecution against BitMEX co-founders and employees for breach of BSA. Source: Justice.gov

Pleading guilty to money laundering is a punishable offense, often punishable by a maximum term of five years’ imprisonment. However, both Hayes and Delo made their guilty pleas before the March trial date and agreed to pay $ 10 million in criminal fines each.

On April 7, Cointelegraph reported that Hayes had voluntarily surrendered to U.S. authorities in Hawaii six months after federal prosecutors first filed charges, to which his lawyers testified:

“Mr. Hayes has appeared in court voluntarily and is looking forward to opposing these unjustified allegations. “

According to to the indictment, public court files, and statements made in court, Hayes was released after posting a $ 10 million bail bond awaiting future proceedings in New York. However, prosecutors from the Office of Money Laundering and the Transnational Crime Enterprise Unit found the contractors to be guilty of failing to implement AML safeguards, including failure to perform know-your-customer (KYC) duties.

Despite the imminent possibility of serving jail time, owning up to the charges resulted in Hayes being sentenced to a home incarceration sentence that forces him to spend the first six months of his sentence from home. In addition, he also agreed to pay a $ 10 million fine.

Related: Blockchain and crypto can be good for tracking financial crimes

Breaking down the myth related to the ease of money laundering using crypto, a new analysis highlights the potential of blockchain technology and crypto to track financial crimes.

While many projects within the crypto ecosystem have been the victims of targeted attacks, bad actors continue to struggle when it comes to raising the stolen funds.

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Speaking to Cointelegraph, Dmytro Volkov, chief technical officer at crypto exchange CEX.IO, said that the notion of crypto mainly used by criminals is outdated, adding:

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