Former BitMEX CEO Arthur Hayes Turns Himself in To US Authorities

Former BitMEX CEO Arthur Hayes Turns Himself in To US Authorities

Former chief executive officer of cryptocurrency exchange BitMEX, Arthur Hayes, has turned himself into the US authorities on Tuesday in the case against the platform, him and other top executives, Benjamin Delo and Samuel Reed, for violating the Bank Secrecy Act.

Hayes, a Singapore resident, surrendered in Hawaii six months after federal prosecutors charged them with conspiring to skirt U.S. laws requiring the implementation of money-laundering controls.

As agreed previously, he appeared before a federal judge in Honolulu and was released on a $10 million bond.

Hayes’ lawyers said in a statement that the “self-made entrepreneur” had been wrongly accused of crimes that he didn’t commit. Having already voluntarily appeared in court, Hayes now looks forward “to fighting these unwarranted charges,” they added.

Launched in 2014, Seychelles-based BitMEX was first probed by CFTC in 2019 regarding whether the exchange broke the rules by allowing US customers to trade on the platform. Serving US customers requires registration with the agency.

Back in October, the same day charges were unveiled by the agencies; Reed was arrested in Massachusetts while Delo turned himself in March. Delo has vowed to fight the charges, calling them unfounded and an overreach by U.S. authorities. Both have been pleaded not guilty and released on bond.

Gregory Dwyer, the company’s first employee and head of business operations who was also charged, meanwhile remains at large. Dwyer’s lawyers said they have been in touch with the government and have informed them of his whereabouts as well. The lawyers said in a statement,

“They are also aware that he has every intention to defend himself in court against these meritless charges and is eager to do so.”

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Author: AnTy

Amended BitMEX Lawsuit Seeks $540 Million From Self-Proclaimed Early Investors

BitMEX, a cryptocurrency derivatives exchange, and its CEO Arthur Hayes has been slapped with a $540 million amended lawsuit by self-proclaimed early investors like Frank Amato and RGB Coin Ltd. They were later joined by Elfio Guido Capone.

The first lawsuit was filed back in December for $300 million, and now it has been amended to include Capone and the amount in damages has been increased as well.

The lawsuit claims that the plaintiffs in the case were the earliest investors and made a seed fund of $55,000 back in 2015 who were promised that their investment would be converted to equity at $10 million post-money valuation.

The plaintiffs seek $90 million for the current value of their equity as well as $450 million in punitive damages based on the current valuation of the derivative exchange.

The lawsuit further claimed that now CEO Arthur Hayes contacted all the three parties involved via Linkedin looking for angel investment as there were no backers for the derivative platform from as early as mid of 2014.

Amanto, at the time, was a commodity derivatives trader at JP Morgan & Co.who said that Hayes was looking for equity investors. He went on to claim that Hayes promised him his investment would buy him 0.5% of Bitmex equity at $50,000 along with equal rights as that of the other two founders of the exchange.

Amanto also claimed that Hayes assured them to notify him in case they plan for another fundraising so that he can retain his ownership percentage. The legal document read:

“Defendants representations and repeated assurances that Mr. Amato’s investment would entitle him to equity in BitMEX were either knowingly false, or were recklessly made to induce Mr Amato to invest money that Defendants never intended to allow to become equity in the business.

In reliance on Defendants’ representations, Mr. Amato executed the SAFE and then, on June 26, 2015, wired Defendants $30,000.”

Capone Accuses Hayes of Misleading and Giving False Information

The newly added plaintiff in the amended lawsuit Mr. Elfio Guido Capone accused Arthur Hayes of giving false information and procrastination after receiving the funding. Capone claimed that Hayes contacted him on a similar promise of offering 0.5% equity at $50,000 at $10 million valuations. When he inquired about other investors in the exchange, Hayes claimed that he had been promised $150,000 to $200,000 from other investors.

Capone contacted Hayes multiple times to convert his $50,000 investment into a 0.5% equity in the exchange, but Hayes backed down and offered $125,000 instead to forget about the equity promises.

Capone claimed that he declined the offer and reached to other two founders of the platform Sam Reed and Ben Delo. However, Ben Delo responded with a meme to his issue, claiming that even though they were headquartered in San Francisco, they can easily evade the accountability by incorporating in Seychelles.

The complaint also claimed that BitMEX established a shell company by the name of ABS Global in order to evade strict security laws. Which they can claim to regulators that Bitmex had no investment from US Investors and can also hide its operations out of California, which is the hub for all operations of the derivative exchange.

The lawsuit can get Bitmex in hot waters and puts them in the same league as Bitfinex which has been dealing with several class-action lawsuits for manipulating their yearly monetary records. BitMEX is one of the most popular crypto exchanges which handles billions worth of Bitcoin every day.

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Author: James W

It’s Bitcoin’s Biggest Test, As Fed’s Money Printer Goes Brrrr: BitMEX CEO Arthur Hayes

Cryptocurrency derivatives exchange BitMEX co-founder and CEO Arthur Hayes in his latest newsletter talked about the current economic environment with high inflationary expectations. According to him, while gold is set to shine in this changed economic regime, it is Bitcoin’s “biggest opportunity.”

In March, Bitcoin crashed by almost 53%, peak to trough as investors raced to the US dollar. According to Hayes, this 2020 Coronavirus crash was “inevitable.” As we have been seeing this past month, the economy and financial markets are set loose and this could be Bitcoin’s opportunity, in its short lifetime. Hayes said,

“Where the Bitcoin price may shine is in the volatile inflationary aftermath of the response to the crash.”

Fed printer Goes Brrrrrr, Got Gold & Bitcoin

In March, Bitcoin wasn’t the only to crash, it actually fell alongside every other asset, equities, stock market, oil, and gold. The 2020 coronavirus stock market crash is establishing itself as “one of the great stock market crashes,” right alongside the Global Financial Crisis of 2008, Dotcom bubble of 2000, 1997s Asian crisis, 1992’s Black Wednesday, Japan asset bubble in 1991, Black Monday of 1987, Oil crisis in 1973, and Wall Street Crash from 1929.

Central banks responded fast, purchasing more government debt and cutting the interest rate down to 0%. However, below zero and into the negative territory means “the public will simply hoard physical cash.”

In his post written in the week following the market crash, Hayes said that we have reached the “reversal interest rate” and the limits of central bank expansionary monetary policy and any further extreme measures will have a net negative impact on the real economy.

Central banks’ monetary policy has an “uncertain outcome” with inflation as the clear winner. And the inflation will come and it will be a shock which we haven’t seen for over 30 years, as such it will be a sudden economic and cultural shock, argued Hayes.

This will take us back to the 1970s when inflation was volatile and reached a high of 15%. And financial markets won’t be unaffected by this which is used to the current regime where they are protected by a “central bank put.”

“Volatile times are ahead,” Hayes said.

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Author: AnTy

Bitcoin Futures (XBT/USD) Total Volume in BitMEX Exchange Hit $2 Trillion Since 2016 Launch

BitMEX Co-founder and CEO, Arthur Hayes, recently announced in a tweet that BTC futures have surpassed the $2 Trillion mark since they were launched back in 2016. The exchange also hit an open interest of over $1 billion; this is part of the total $4 billion distributed amongst other leading players like OKEX.

Hayes’ tweet on Feb 3, further highlighted that the daily average Bitcoin Futures turnover in BitMEX is close to 288K with most of its clientele in Europe.

Bitcoin Futures; The Crypto Darling for Institutional Investors in 2020?

This year has seen the open interest on BTC futures go up by around 60%. Could this mean more institutional investors are speculating on this digital currency derivative? The most recent data analyzed by Skew Markets however show that only four major exchanges account for the existing $4 billion open interest in BTC futures.

BitMEX leads the pack followed closely by OKEX; both exchanges account for over $1 billion in open interest independently, roughly 50% of the total. Developments in regulatory frameworks for blockchain and crypto by some countries is one of the driving factors to adopt XBTUSD as a speculative asset in institutional portfolios. Last month, the markets recorded a high of $25 billion in BTC futures volume traded within a day.

Despite the success, BitMEX has faced a number of challenges; notably was the Coinbase Pro maintenance shutdown towards the end of January. Close to $28 million worth of XBTUSD contracts were liquidated during this period; some analysts have since said this was because over 50% of the BitMEX weighting index is supported by Coinbase Pro.

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Author: Lujan Odera