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NEW YORK – The co-founder and former chief executive of the cryptocurrency exchange Bitmax has been sentenced to six months in jail after pleading guilty to violating the US Bank Secrecy Act, U.S. prosecutors say.
Arthur Hayes, 36, will also have to pay a 10 million fine and two years probation after he was placed under house arrest for failing to establish an anti-money laundering program at Bitmax with Benjamin Dello and Samuel Reid in 2014. Hayes was sentenced. In federal court in Manhattan on Friday.
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Arthur Hayes deliberately defied U.S. law, which required businesses to play their part in preventing crime and corruption, while creating a cryptocurrency platform that earned him millions of dollars, Manhattan’s top federal prosecutor Damien Williams said in a statement.
Prosecutors wanted a “significant” prison term, saying the 10 million fine was not enough to deter other cryptocurrency companies from doing the same. Hayes’ lawyers sought entry without house arrest.
A spokesman for Hayes declined to comment on the sentence.
Dello and Reed have pleaded guilty and are awaiting punishment.
The three were indicted in 2020 for failing to implement the “Know Your Customer” requirement under federal law.
Prosecutors say Bitmax is “actually a money-laundering platform” and Hayes did nothing after learning in 2018 about allegations that Bitmax was being used to launder money from cryptocurrency hacks.
BitMEX last year agreed to pay up to $ 100 million to settle a separate charge for illegally accepting customer funds to trade cryptocurrencies without being registered and for failing to conduct customer due diligence.
(Reporting by Luke Cohen in New York; Edited by Will Dunham)