Arthur Hayes (banker)

Arthur Hayes is an American entrepreneur and a co-founder and former CEO of BitMEX. In 2022, Hayes pled guilty to breaking United States Bank Secrecy Act violations and was sentenced to six months of home detention, two years of probation and a $10m fine.

Background

Hayes was born in 1985 in Detroit, Michigan. He attended Nichols School, a private preparatory school in Buffalo, New York, and graduated in 2004. His family relocated to Buffalo, New York, after searching for a school that they felt would give him the environment to thrive as a student, and as an athlete. Hayes has created scholarships for students so that they can experience the education that he received at Nichols.
His mother Barbara Hayes is quoted as saying "Nichols gave him the setting, the stimulation, and at one point, the scholarship to thrive.”

Hayes has a B.S. in economics and finance from Wharton School of Business at the University of Pennsylvania.

Career

Hayes moved to Hong Kong in 2008, to start his investment banking career. He worked for Deutsche Bank, as an equity derivatives trader, and for Citigroup for five years. He worked as the head ETF market maker for both firms. In 2011, Hayes left Deutsche Bank, and began working for Delta 1 trader for Citibank in Hong Kong. Hayes was reported as being the youngest African American crypto billionaire in history.

He co-founded BitMEX in 2014 with Ben Delo and Samuel Reed. In March 2019, Arthur Hayes contributed $2.24 million to the Jackie Robinson Foundation (JRF) Scholars program.

Bank Secrecy Act violations

In July 2019, Nouriel Roubini made claims to the Commodity Futures Trading Commission (CFTC), and United States Department of Justice (DOJ) that BitMEX was involved in illegal activities.

In October 2020, Hayes along with his co-partners were indicted by the U.S. Department of Justice for an illegal operation. The charges by the (DOJ) in the case (United States vs Hayes et al), stating that Hayes and partners refused to register the company in the United States, and that they had 'thousands of US based customers'. Which is a violation of basic compliance standards. An operation DOJ says enabled money laundering activities under the bank security act.
The CFTC charges that the illegal operations enabled money laundering activity under the Bank Secrecy Act.

BitMEX is the first crypto exchange to be charged under the bank security act. The laws require that transactions that are over $10,000 must be reported. It is known as Know Your Customer (KYC) data. Hayes stepped down from BitMex in October 2020. Alexander Hoptner replaced Hayes as CEO of BitMEX.

In April 2021, Hayes surrendered to United States Authorities in Hawaii on changes of violations with the U.S. Department of Justice. According to an article published in the Financial Insight Zambia Limited, on February 9, 2021, in their opinion Arthur Hayes' crime is that he refused to allow the CFTC to obtain the account information on Bitmex's customers. United States citizens used Virtual Private Network (VPN accounts) to set up BitMex accounts. Because the BitMEX platform is not registered in the U.S. or Canadian province of Quebec their citizens are prohibited from using the platform. Citizens were able to mask their locations by using (VPN) networks. An article published in the Wall Street Journal on August 10, 2021, stated that a settlement was reached between BitMEX and the CFTC. BitMEX agreed to pay a $100 million fine to resolve the issue.

On 24 Feb 2022, Hayes, along with co-founders Benjamin Delo and Samuel Reed, and Gregory Dwyer pleaded guilty to "willfully failing to establish, implement, and maintain an anti-money laundering (“AML”) program at BitMEX." Hayes was sentenced to two years probation with six months of home confinement.

References

{{DEFAULTSORT:Hayes, Arthur
Hong Kong billionaires
Hong Kong businesspeople
Living people
1985 births
Wharton School of the University of Pennsylvania alumni
Deutsche Bank people
People from Buffalo, New York