Prosecutors have filed a sentencing recommendation against Arthur Hayes, a co-founder of BitMEX, seeking minimum one-year imprisonment.
The prosecutors submitted the sentence recommendation to U.S. District Judge John Koeltl in Manhattan on May 12.
The suggestion came after Hayes pled guilty to violating the U.S. bank secrecy law. His sentencing is later in May. Before that, Hayes signed a plea deal saying he would serve six to 12 months in prison. The plea deal involved him paying $10 million in fines.
Before accepting the plea deal, Hayes faced up to five years in prison for each count of his October 2020 indictment.
However, the prosecution said:
Before that, Hayes' lawyers requested that he serve no jail time. They appealed to Judge Koeltl to let Hayes live abroad and travel freely.
On the other hand, the probation office said Hayes should be given a two-year probation sentence.
According to the prosecutors, Hayes and his co-defendants, Benjamin Delo and Samuel Reed, did not integrate programs to prevent money laundering into BitMEX. The trio set BitMEX in Seychelles to avoid regulatory scrutiny, according to the prosecutors.
BitMEX denied the allegations at first. A group of firms that operated the exchange agreed to pay $100 million to end claims that they allowed illegal trades for years. BitMEX said it had enhanced its compliance program and would be pleased to move beyond the investigations.
Delo and Reed agreed to pay $10 million each. Their sentencing hearings are scheduled for June 15 and July 13th.
Gregory Dwyer, the exchange's first employee and former head of business development, declined charges against him, unlike BitMEX's co-founders. His trial is scheduled for August 2022.