Profile Bitmex Arthur Bitmexciralsky Vanityfair: Arthur Hayes, the Cofounder of Bitmex, an unregulated crypto trading platform that allows for leveraged bets on cryptocurrencies, was the subject of a CFTC lawsuit filed in September 2018. The CFTC alleges that Hayes and his company have repeatedly violated U.S. laws on trading and market manipulation without registering with the CFTC. While the suit has resulted in a large fine and a temporary injunction against trading on the exchange, Hayes remains at large.
Over the past 11 days, Arthur Hayes has been evading authorities through Asia. His current location is unknown. Recent rumors say that he’s hiding in Japan; other rumors say he’s hiding in South Korea, Vietnam, and Malaysia. Several people have taken to social media to spread information about his whereabouts and provide tips so that he can be captured.
According to an article written by Bloomberg, the U.S. Justice Department is seeking extradition of Hayes, who is a citizen of the United Kingdom. They plan to charge him with conspiracy to commit wire fraud and commodities fraud, which are both federal crimes. To avoid extradition, Hayes could instead face federal charges in the U.S., according to Bloomberg.
Hayes was issued a subpoena by the CFTC on Sep 19, 2018 regarding his involvement with BitMEX . The subpoena asked for information about trading on the exchange, as well as a list of every Altcoin and digital asset that Hayes had purchased, sold, exchanged, or possessed at any time.
On the same day, an order was made by a Philadelphia judge for Hayes to appear in court on Sep 20. He was given until noon to show up in court; if he didn’t show up he’d be fined $250,000 USD. It’s unclear if Hayes has shown up yet. However, he and his lawyer did post a statement to their website that said “The Hayes family has been separated from Arthur for more than 20 years, and we are far from home. We are working hard in foreign jurisdictions to ensure Arthur’s safety and well-being.”
Hayes’ family released a statement on social media, apparently written by Arthur himself, saying: “Over the past several weeks there have been many inflammatory articles published about me that have shown a complete lack of understanding of the situation. Due to the danger to my family, I am forced to issue this statement: I am fine. Please leave me and my family alone.”
A BitMEX spokesperson told Bloomberg that they are aware of the situation and that Hayes is still an employee. They also said that they were “looking into it”.
The CFTC fined BitMEX COO Arthur Hayes $150,000 USD per day for violating CFTC regulations with regards to trading cryptocurrencies. They also issued a temporary injunction that restricts Hayes from “making, executing, or facilitating any trades in any commodity that is subject to the Commodity Exchange Act” .
The CFTC found that Hayes had made at least 1 million USD through his trading activities. The majority of this was earned in just one year, when he earned $1.2 million USD worth of profits. BitMEX has also been fined $700 million for their involvement in the case by the CFTC.
This comes after a New York district court declared that the agency could issue subpoenas to third parties in pursuit of those who have broken their laws.
The process of civil forfeiture is different from a criminal forfeiture . The latter involves confiscation of assets gained from criminal activity. The former, on the other hand, allows for the seizure of assets that are connected to a crime, regardless if the owner was involved in it or not.
The CFTC claims that Hayes and BitMEX violated U.S. commodity laws , since they allow users to make leveraged trades on their platform. In the statement released by the CFTC, they also allege that Hayes and his company broke several other U.S. laws regarding market manipulation and trading without proper registration with the CFTC as a Commodity Trading Advisor (CTA).
In order for the CFTC to prove that Hayes was a CTA, they considered BitMEX itself to be an organization .
