The Original King of Crypto Is Back


by Jen Wieczner

Arthur Hayes rubbed success in the Feds’ face and got busted. Now he’s returning to a shell-shocked industry.

This story may sound familiar: 

A brash young man with a blue-chip education spends a few years as a trader before starting a crypto exchange and quickly becoming a billionaire. He’s on TV a lot, slays on Twitter, and emerges as the face of the insurgent industry — the kind of entrepreneurial rebel you can’t help but pay attention to, even if you aren’t a bitcoin person. The young man is the acknowledged crypto king. Then, maybe on account of hubris, he starts to make mistakes. Even though he lives abroad, U.S. law enforcement takes notice. An indictment drops. He negotiates the terms of his return to the States and surrenders to federal authorities, facing multiple felony counts. Neither he nor the crypto industry will ever be the same.

This is not just the arc of Sam Bankman-Fried. It’s also that of Arthur Hayes, who appeared on the crypto scene before SBF, got sidelined, and is now poised to return to it. The parallels are all the more remarkable because so much else in their lives is different. Where Bankman-Fried was a white kid from an elite echelon of society, Hayes was a Black kid from the Rust Belt. Where Bankman-Fried is a zhlub who looks like he logs 20 hours a day at a computer, Hayes is impossibly chiseled and handsome. Where Bankman-Fried was tagged for success his entire life, Hayes created his fortune almost as an act of will, surprising pretty much everyone but himself. In 2014, when Hayes was setting up the exchange known as BitMEX, there were no reverent venture capitalists salivating over his vibe or speculating that he would be history’s first trillionaire. He slept on a friend’s couch for months to save money during a period when the whole gambit looked like a failure.

And then there’s the biggest difference: Where Bankman-Fried effectively (but still allegedly) stole billions of dollars from regular people around the world, Hayes has never been accused of taking anything that didn’t belong to him, or lying to his customers, or running a crooked business. “He’s absolutely one of the good guys of crypto,” says Nic Carter, the co-founder of Castle Island Ventures, a blockchain-focused investment firm. “BitMEX never screwed over their clients, never got hacked, never lost money.” If anything, Hayes has become something of a bitcoin martyr. “He’s not the typical bad actor who embezzled money or stole money or did something really nefarious,” says Daniel Bresler, a partner at the law firm Seward & Kissel, which specializes in crypto and financial crime. “He didn’t follow rules that some people say shouldn’t exist in the first place.”

Hayes, who is 37, does have his detractors. The economist Nouriel Roubini calls Hayes the sleaziest player in a sleazy industry, even when considering Bankman-Fried. (SBF, for his part, has pleaded not guilty.) Hayes made enemies by joking about bribing government officials, posing next to a fleet of supercars on the streets of New York, and taunting the Securities and Exchange Commission on Twitter. Investigators were motivated to come after him. They compiled evidence that Hayes had intentionally violated banking law by failing to guard against money laundering; by accepting Iranians as customers, against U.S. sanctions; and, most important, by allowing Americans to trade on BitMEX without meeting various obligations.

Whether one chooses to see Hayes as a white-collar criminal or a scapegoat, an uncomfortable question hangs over his treatment: Is it a coincidence that the only Black entrepreneur at the top of the crypto game was nailed for doing things that were not particularly unusual among his peers? “The optics around ‘The one guy in crypto they’re going to put in jail is the Black guy’ are pretty fucking shitty optics,” says one of the industry’s most prominent figures, who didn’t want to be identified while discussing a sensitive case.

On April 6, 2021, Hayes touched down at an airport in Honolulu and surrendered to federal agents on the tarmac. He pleaded guilty to a single charge of violating the Bank Secrecy Act, paid a $10 million fine, and, last summer, began a six-month term of house arrest. For Hayes, it was an extended period of relative silence. He still tweeted and blogged about crypto from time to time, but he was careful not to further piss off the Department of Justice and jeopardize the fairly lenient sentence. When it was up in the middle of January, he flew the hell out of America and eventually landed in Japan, where he has been skiing six days a week and dreaming up his next move.

“We have this virus that is bitcoin, and I want to do my part to infect as many people as possible,” he told me. “We’re going to hopefully destroy the TradFi system,” he added before catching himself. (He still has to get through two years of probation without drawing any more scrutiny from the Establishment.) “Not destroy. Give another alternative for people to use.”

It was interesting to see that Hayes cared so much about taking down old-school finance — the industry that had given him his start and the technical knowledge that allowed him to create a crypto empire. “You want to spend your life doing something that you think could actually change some things in the world,” he said. “Hopefully, I can be on the changing end of it and reap the rewards, both from a ‘Yes, I was right’ perspective and the ‘Yeah,
I made some money out of it,’ too.”

Photo: Mikaela Martin

Just before he 

left the U.S., possibly for good, I visited Hayes at the apartment where he was serving out his punishment: a shiny white three-bedroom he owns in South Beach. It had a wide balcony overlooking Biscayne Bay and a wraparound terrace covered in bougainvillea; straight ahead was the Miami skyline, and down below were flocks of sailboats skimming across the water. It was 81 degrees outside, but inside Hayes’s home it felt ten degrees hotter. After more than a decade of living in Southeast Asia, he preferred not to use air-conditioning.

Hayes, who had just returned from stretching out his hips in a yin yoga class, was not sweating. He spent much of his sentence lifting and stretching, and his chest was so broad, his shoulders so built and sculpted, that they gave the illusion he was wearing armor. Hayes was permitted a couple of hours each day to exercise outdoors. In various corners were tennis racquets and swim goggles; a bike helmet sat on the counter next to a loose American Express Platinum Card. He liked to pick up healthy food and juices from Pura Vida cafés, where fans sometimes recognized him, contributing to the idea that his home confinement was not particularly confining. Hayes kept an office at a nearby WeWork and occasionally got permission to go out to dinner, allowing him to hold court with Miami’s burgeoning crypto community. In September, Hayes threw an after-party for a conference in Singapore, remotely buying the room drinks while sitting in South Beach. Over Christmas, the government let Hayes travel home to Hong Kong.

Given how nice his circumscribed life seemed, Hayes was at times surprisingly guarded and sour. He worried about getting kidnapped. “I’m more concerned about security in the U.S. because people have guns here,” he said. He described a reflecting pool at his building’s ground level, stretching expansively toward the ocean, as a “waste of space” that was impossible to enjoy because of all the mosquitoes and midges. “In Singapore,” he said admiringly, — where he’d been living until his confinement — “they kill the bugs.” He no longer considered America his home.

To keep him company in South Beach, Hayes brought several stuffed animals out of a collection of more than a hundred plush toys he keeps in Asia. He purchases them to celebrate milestones, gives them names, and lines them up on his bed. At his place in Miami, I counted a chartreuse starfish, a fox, an armadillo, a giraffe, an elephant, an octopus, and a snake plus an anthropomorphized bok choy. “Sometimes I do have a whole suitcase full of toys that I travel with,” he said.

There is nobody else in crypto quite like Arthur Hayes, especially because the industry’s biggest personalities keep theatrically imploding. Hayes’s house arrest was roughly bookended by the blowups of Three Arrows Capital, run by Su Zhu and Kyle Davies, and FTX, led by Bankman-Fried. He’s outlasted them, but their demise has changed the crypto landscape forever. There is a festering distrust among many of the surviving players, and regulators have been emboldened to rein them in. “We’ve destroyed every single poster child of crypto,” Hayes said. “Every single person who was held up as a role model for how companies should act has been proven either bad at business or a complete fraud. So I think we’ve pretty much reached the bottom.”

Hayes swore he wasn’t angling to fill the leadership void. “That’s not the point of crypto,” he said. “It shouldn’t be based on a very small set of people who run companies.” But he was stepping into the power vacuum in a different way, as a commentator and market mover, through an influential blog and Twitter account that are must-reads among the crypto faithful. Hayes wrote three essays on the fall of FTX, including one titled “White Boy,” a long meditation on “how SBF used his born advantages and uber social intellect to bamboozle everyone into thinking he was a crypto wunderkind and the future of the Western-led financial establishment.” He continued his denunciation on Twitter. “When I need to get my daily dose of veggies, I take a bite out of this lil’ soy boy. Helps me stay swoll,” Hayes tweeted alongside an old image of him appearing to bite into a paper cutout of Bankman-Fried. “When I bit into SBF I was disappointed. Didn’t get all my macros cause he is a fake vegan. This dude is 100% fugazi.

Hayes has ample reason to feel Schadenfreude. At its height in 2019, BitMEX was worth billions, and it had a controlling market share in crypto-derivatives trading, moving $1 trillion worth. But that was the same year Bankman-Fried founded FTX, and his platform and others (which offered spot trading and additional products) rapidly ate away at Hayes’s business. Eventually, FTX came to dominate BitMEX by orders of magnitude, as did Binance, which is now the undisputed leader. Today, BitMEX barely cracks the top-ten derivatives exchanges, according to CoinMarketCap.

It’s still a lucrative business, taking a small percentage of every trade that it processes. “There’s not very many opportunities in financial history where you get to own exchanges,” Hayes said. “They’re basically just money-printing machines.” His fortune fluctuates from hundreds of millions of dollars into the neighborhood of a billion, depending on prices, and he is investing it in a variety of ways. His family office, Maelstrom, has made between ten and 20 investments in private companies, including a “meaningful” stake in a robotic-sex-doll start-up. “I’m really in love with what those guys are doing,” he said.

He’s also actively playing the markets. “I’m a trader,” he said. “If it moves, I’ll trade it.” Hayes predicts a bull market for most of the period between now and 2026 and then an economic disaster of a scale not seen since the 1930s. “I think that every central bank will be fixing the price of their government bonds within the next 12 to 18 months,” he said. “And that’s going to lead the next mega-upcycle in all risk assets and then we’re going to have a generational collapse. And that’s my view.” Hayes burst out laughing — his standard startling roar, like activating a speaker that’s been left at too high a volume.

His sense of opportunity applies to crypto, too, as it recovers from the wreckage of FTX. Bitcoin is already up some 50 percent since the time of the company’s chaotic bankruptcy. “There’s always a season for different types of things,” Hayes said. “Sometimes there’s a deep-value season and then there’s a shitcoin season where any piece of dog shit can go up 50 times. You want to be participating in all parts of the cycle. So, yeah, I’ll invest in deep tech and crypto that’s doing decentralization and actually living the vision of Satoshi’s white paper. And I’ll invest in complete shitcoins. Because I think I can time the market and buy a narrative and sell when the narrative is topped out. We’ll see if that actually happens in practice.”

Photo: Mikaela Martin

In August 2004, 

at the start of his freshman year at the University of Pennsylvania, Hayes began going to the gym at 5:30 each morning with a new friend. As Black students in the Wharton undergraduate business program, they used the dawn sessions to imagine their future. “Being rich was our specific goal,” says the friend, Justin Anderson, who is now a venture capitalist. For Hayes, who had grown up in Buffalo and Detroit, the child of auto-industry workers who divorced when he was 11 years old, it was still very much a matter of imagining. One morning that month, as he and Anderson waited for the elevator, they were feeling especially ambitious. “I remember pushing that button, and there was a little silence and then it was like, ‘We’re going to be billionaires,’” Anderson says. “I think he saw himself being some kind of a financial wizard — a financier, more Gordon Gekko than Mark Zuckerberg.”

The way Hayes seemed to skate his way through the most difficult challenges at Penn astonished some of his Black peers as much as it inspired them. “You don’t get to where you’re at as a Black professional not being confident in yourself, but he’s on another level,” says Anderson, who became president of the Black Wharton Undergraduate Association. “In Arthur’s world, there aren’t really obstacles. You just do the thing. Arthur obviously knew he was a Black man in a predominantly white setting at Penn, but he never acknowledged that from the perspective of it being a challenge.” Hayes placed in Mr. Penn, the school’s bodybuilding competition, and set his course for the finance industry in Asia.

“People in Buffalo stay in Buffalo. I didn’t want to stay in Buffalo,” Hayes told me. The conventional move of heading to Manhattan felt like a cliché and a strategic mistake: “Why do the same thing that everyone else in my class is doing? I’m going to get the same result as everybody else.” The summer after his junior year, in 2007, he won an internship at Deutsche Bank in Hong Kong. Hayes describes his arrival as love at first sight, starting with the taxi ride out of the airport, past palm trees and endless stretches of shipping containers and verdant mountains overlooking the city’s rainbow-tinted skyline. “The energy in Hong Kong was just out of control,” he said. “I wanted to be part of the China story.”

At Deutsche Bank, he worked on the equity-derivatives sales desk, where one of his lowlier tasks was fetching meals for superiors. “That’s all pretty standard, but as an enterprising and broke intern, I endeavored to make a profit from my role as a food sherpa,” he later wrote on his blog. “I charged a pretty hefty spread on every order such that I made a few hundred dollars per week profit. Lest you think I acted out of line, everyone on the desk knew what I was doing, and tacitly approved. Game respects game.”

Hayes was also a club rat, which helped him secure his first full-time job upon returning to Philadelphia for his senior year. As he recounted in another blog post, Deutsche Bank sent recruiters to Penn. “During my interview I expressed my love of partying in Hong Kong,” Hayes wrote. As a test, one of the senior recruiters asked him to recommend some local nightlife spots. Hayes delivered: “Fast forward, we are all drunk as fuck in a Philly house club downtown. REKT.” After graduation, he rejoined the bank in Hong Kong as a trader.

Hayes tested the limits of the city’s buttoned-up finance culture. “He always was kind of a larger-than-life type of guy, even as an intern, always kind of pushing the envelope,” says one of his roommates from that time, Andrew Goodwin. “You should see his yoga pants.” At work on one Casual Friday, a department head walked past Hayes’s desk and said, “Who the fuck is that?” He was wearing a tight pink polo shirt, acid-washed jeans, and bright-yellow sneakers. Casual Fridays were canceled.

The market crash of 2008 sucked some more fun out of the well-paid expat lifestyle, and as the recession took hold, Hayes started converting his funds into gold. This was both an investment and an insurance policy in the event of social upheaval. “The boatman only takes gold coins,” a friend remembers Hayes telling him.

Hong Kong was full of expat finance bros who sought something more exotic than Wall Street and tended to share an ideology — pining for the return of the gold standard, deploring capital-gains taxes, believing that central banks would be the western economy’s undoing. “Hong Kong attracts a lot of hard-core libertarians because it’s low tax, low regulation,” says Hayes’s friend, who puts him in that group. “The socialists stay in New York.”

It was no surprise that Hayes latched on to bitcoin relatively early. The moment came in the spring of 2013, after Hayes, who had taken a new job with Citigroup, was laid off. “I’ve always wanted to find the next thing,” he said. His first trade quickly netted him several thousand dollars. Hayes remembers a sense of being present at the birth of a revolutionary technology on the scale of the printing press or the telegraph. He spent the next year and a half crashing on a friend’s couch while he experimented with crypto maneuvers, looking for arbitrages like the ones he’d learned about in banking.

At one point in 2013, because of the strict controls China places on the movement of money, the price of bitcoin on the mainland soared relative to what it cost in Hong Kong. Hayes started buying bitcoin at the lower price, then selling it on a Chinese exchange, withdrawing the profits into mainland bank accounts he’d opened with a fake address. Then he’d take a bus from Hong Kong across the border to Shenzhen, withdraw the money, and return with it stuffed in his backpack. During one of several crossings, Hong Kong authorities detained him as part of an investigation into a suspicious bitcoin transaction. Hayes managed to convince the officials that he was a victim in the deal too. They let him go.

Talking crypto on CNBC in 2018. Photo: CNBC/YouTube

Alegend was building 

around Hayes, who already stuck out in Hong Kong and not only because of how he dressed. “You are most likely familiar with the almost mythic hero’s tale that has circulated in crypto circles,” Goodwin once wrote. Strangers and friends alike sometimes called Hayes hak gwai, a Cantonese slur meaning “Black ghost.” But Hayes was comfortable being different. “When you come out to Asia, what a lot of people don’t understand is you actually want to stand out. If you’re going to a region halfway across the world and you just want to blend in, then why’d you leave?” he told me with a guffaw.

Hayes admired the concept of trustless currencies. “Crypto is the only asset that is actually yours,” he said; at another point, he spoke reverently of bitcoin as “pure energy in digital form.” But he was distinct from many other early adherents in that he never kept much of a stockpile. “Having your entire net worth in this super-volatile asset, where you can’t control the outcome, would be very stressful. I don’t have that kind of strength,” he said. “I’d rather own a business where I’m directly responsible for its success and failure.”

At the time, start-ups such as Coinbase were opening exchanges that sought to make digital coins accessible to everyone. Hayes saw an opportunity for a more exclusive venture. One of his specialties at Deutsche Bank and Citi had been trading futures contracts. “I live and breathe derivatives,” Hayes said. He imagined a niche exchange for sophisticated traders who wanted to bring Wall Street–style maneuvers to bitcoin. The platform would not accept other digital coins or fiat currency; it would look and feel like a Bloomberg Terminal. Hayes teamed up with Ben Delo and Sam Reed, fellow crypto enthusiasts who knew how to code. In 2014, they started BitMEX, short for the Bitcoin Mercantile Exchange — a nod to the Chicago Mercantile Exchange, the iconic derivatives marketplace. They incorporated in the Seychelles, which asked little disclosure of its financial companies, with Hayes as chief executive officer.

At first, for more than six months, virtually no one traded on BitMEX. By the spring of 2015, Hayes was ready to give up. He emailed his co-founders, pitching a pivot: Hong Kong was a top destination for secondhand electronics; what if their site traded used iPhones instead? Delo and Reed shot him down. Eventually, they decided to lure customers to BitMEX by allowing them to take more risk. The big money in derivatives trading comes with using leverage — borrowing funds to make larger bets, multiplying winnings but also amplifying losses. Hayes, Delo, and Reed increased BitMEX’s leverage limit to 50 times, more than double the level of their competitors. Then they went to 100 times. It branded BitMEX as the place crypto’s boldest traders, or maybe its most reckless, needed to be. “Instantly, we became profitable,” says Delo. The ultrahigh leverage became so core to BitMEX’s brand that the company’s parent changed its name to 100x Group.

The founders also decided to more aggressively market their platform to amateurs. As Hayes once put it in a presentation about BitMEX, “There are people who offer similar types of products but are focusing on degenerate gamblers, a.k.a. retail traders in bitcoin, so why don’t we do the same?” The problem was that retail traders weren’t used to trading derivatives; they would message Hayes with complaints that their contracts “all of a sudden went away!” (They had expired.) Customers frequently called the founders scammers.

That’s when Delo had an insight that would become BitMEX’s signature innovation: What if it made a futures contract that never expired? In May 2016, BitMEX introduced what it called a perpetual swap — a 24/7-trading, continually updating derivative that would simplify betting on the future price of bitcoin. “It proved to be revolutionary for liquidity in crypto markets,” says Darius Sit, the founder of QCP Capital, a Singapore-based crypto-trading firm. As an exchange, more liquidity meant more profits for BitMEX. Hayes stood to make money whether the price of bitcoin was up or down, as long as people kept trading.

A month or so after the perpetual swap debuted, he met colleagues in a dim sum restaurant in Hong Kong brandishing a newspaper: The U.K. had voted for Brexit, and the markets were in an uproar. “We’re going to be rich, motherfuckers!” he howled.

The notorious debate in Taipei with Roubini (left) in 2019. Photo: BitMEX/YouTube

By 2017, BitMEX 

was earning so much that Hayes and his co-founders turned down an investment offer from a venture fund that valued the company at $600 million. The three had struggled to raise funds when BitMEX was born, so they still retained nearly all of the equity. The next year brought a bear market in bitcoin, but that just made people trade even more on their platform. On a single day that summer, BitMEX processed transactions worth $8 billion, yielding Hayes, Delo, and Reed a $4 million cut — an absurd haul. They took 45th-floor office space in Hong Kong’s financial district and kitted it out with spaces for billiards, poker, and mahjongg along with a vast bar and a Lamborghini-branded sound system. Two stone temple lions were installed at the office entrance. The real conversation piece was a tank containing three blacktip reef sharks. It cost more than $100,000 a year to maintain and, according to Delo, was so heavy it required reinforcing the building with additional support pillars.

Hayes wasn’t in the office all that much, and according to him, some of this excess was driven by others. “I got back from vacation somewhere and I saw this in the plan and I was like, ‘Okay, whatever,’” he said about the sharks. But he had been the social chair of his Penn fraternity, and when he did show up to work in person, he encouraged a frat-house culture, sponsoring parties and stunts like eating contests. “He’d show up with a wad of cash and a bunch of Big Macs and be like, ‘Who wants to do it?’” says Reed. To the outside world, Hayes assumed the role of ambassador — for BitMEX and for crypto’s renegade ethos as a whole. “There was always a joke: He wanted to be a trader, but he would have been an amazing sales guy,” says Goodwin.

In May 2018, Hayes traveled to New York for the Consensus crypto conference and stole the show before even going inside: BitMEX parked three Lamborghinis outside the midtown venue. Hayes called it “a guerrilla-marketing tactic,” acknowledging it might have seemed “a little bit gauche.” The supercars were rented from a man who wouldn’t even let the BitMEX crew drive them, and they racked up something like $1,000 in parking tickets. Reed says, “In retrospect, I wish we hadn’t done the Lamborghini thing because no one got the joke.”

But the stunt fit Hayes’s persona, exuding a swagger that made clear he answered to no one. A saying started to circulate: Arthur always makes money, even when nobody else does. A meme also began to go around, though it was a fabrication: a supposed screenshot of Hayes directing a staffer to “run the stops of the remaining plebs. I need a new Ferrari.” It referenced a common (if unsubstantiated) belief at the time that Hayes was manipulating the market and trading against customers. He didn’t exactly discourage the car myths. Toward the end of 2018, he slapped a bumper sticker on an ambulance that BitMEX donated to the Seychelles: MY OTHER CAR IS A LAMBORGHINI. He also purchased a yellow Ferrari Portofino. Motorheads consider the model a sports car for people who don’t actually care about cars; some in Hayes’s inner circle teasingly called it “the pussy Ferrari.” Hayes hated driving it. “I’m not a car guy,” he said. “I’ve crashed two cars in parking lots.”

As befits a global tycoon, Hayes took his antics around the world. Despite the fact that BitMEX could not legally do business in the U.S., he returned to New York to throw a toga-themed charity event at Cipriani Wall Street, featuring chateaubriand, lobster, and a performance by Rick Ross. On another occasion, Hayes flew one of his favorite DJs, Christian Smith, from Europe to a club in Asia because he wanted to dance to music he liked.

Hayes kept some parts of his life intensely private. Many of his closest colleagues didn’t know he had a brother, who is intellectually disabled, until the relationship came up in court. Hayes avoided several topics in our interviews, but his one firm condition was that I not name his wife, whom he married in 2018. “We like to joke that there’s Arthur Hayes and there’s @CryptoHayes, his Twitter handle — and they are different people,” says a colleague. “Arthur is a front man, a showman, a P. T. Barnum,” says Delo.

The circus act caught up to Hayes in the summer of 2019, when he took the stage for what was billed as the “Tangle in Taipei” — a debate with Roubini, the noted economist and vocal critic of crypto. Roubini wore a suit, while Hayes dressed in skinny jeans with gaping holes at the knees. It took less than ten minutes for him to self-sabotage. Asked by the moderator why BitMEX was located in the Seychelles, Hayes said that companies need not “bow down and take an ass-fucking from the U.S. government just because it’s regulated.” He went on, “I didn’t really want to sit on bottom bunk with Bubba all day. So I got out of that situation.” The only difference between the U.S. and Seychelles regulators? “It just costs more to bribe them.” How much does it cost in the island chain? “A coconut.”

Hayes maintains he was joking; Roubini is still aghast. “I mean, they’re all crooks, but at least they pretend not to be crooks,” he tells me. “This guy, no. He said, ‘I can do whatever I want to.’ It’s a level of admitting he was a crook. I’ve never seen anything like this, even in this space, where they’re all criminals.”

By seeming to assert that he was operating outside the jurisdiction of the U.S., when in fact any entity that interacts with the American financial system is subject to its laws, Hayes might as well have asked regulators to target him. In a way, BitMEX did just that. An investor lawsuit alleged that shortly after the Roubini clash, someone at the exchange answered a complaint with a meme featuring Hayes’s smiling face and the text “INCORPORATED IN SEYCHELLES. COME AT ME BRO.”

When news of a federal investigation broke, customers reportedly withdrew $500 million from the platform. The Department of Justice indicted Hayes, Delo, Reed, and their first employee, Gregory Dwyer, in October 2020. “The thing regulators in D.C. hate the most is being embarrassed. The reason they were charged was because what they were doing was blatant,” says a former official at the Commodity Futures Trading Commission, which charged Hayes, Delo, and Reed in tandem. (BitMEX settled the CFTC case for $100 million, subject to later reductions.) “You had Arthur Hayes running Lamborghinis in New York. The DOJ had strong evidence that Arthur Hayes was directly communicating with customers in Iran. So there were plenty of smoking guns there to prove that they knew what the law was, they were ignoring the law deliberately, and they were actively engaging in violating the law.”

Hayes resigned as CEO and, a few months later, chartered a private jet and flew to Hawaii to be arrested while dressed casually in a T-shirt. Marshals boarded the plane and fingerprinted and cheek-swabbed him. Then a pair of FBI agents in bulletproof vests handcuffed Hayes and drove him to a courthouse, where he pleaded not guilty. After a ten-day quarantine, he jetted back to Singapore, where he’d been spending time during the pandemic. The experience could have been much worse. Reed, a JavaScript programmer originally from Wisconsin, was at home in a suburb south of Boston with his 3-month-old infant, wife, and in-laws. At 6 a.m., more than a dozen FBI agents and police officers banged on the door with guns drawn, then handcuffed him to a chair in his living room. Reed was taken to a federal building downtown and spent some ten hours alone in a dank basement cell, ankles cuffed together.

It was likely the threat of prison that persuaded Hayes to change his plea to guilty in February 2022. Federal prosecutors for the Southern District of New York told the court that BitMEX was “a tool for money laundering and criminal activity,” conducting more than $200 million in suspicious transactions; it didn’t report a single one to the government, as required. In one instance, the government alleged, Hayes unfroze the account of a suspected hacker, allowing them to withdraw bitcoin that was likely stolen. Because the company didn’t ask traders for identifying details, prosecutors wrote, “the full scope of criminal conduct on BitMEX will never be known.”

Prosecutors asked the court for “a significant sentence of incarceration” above the guideline recommendation of six months to a year. Hayes struck a remorseful tone, telling the court, “While I have much to be proud of in terms of the accomplishments of BitMEX, I deeply regret that I had a part in this criminal activity.” Hayes’s lawyers submitted testimonials from friends, the family dentist, and Mike Novogratz, a former Goldman Sachs partner and hedge-fund manager who now leads Galaxy Investment Partners. “It should not be lost on anyone that Arthur is a young, successful black man in a country and industry that needs more of them,” Novogratz wrote. In May, the judge stuck to the lower bound of the sentencing guidelines and avoided incarceration entirely.

Shit happens. 

Moved on,” Hayes said when I asked him why he was ready to tell his story. He resisted every time I asked him to expound on his regrets: “If you sit here and just dwell on the past all day, you’ll be fucking miserable. And I mean, I’m still here. I’m not going anywhere.”

“I’ve obviously got a lot of guardrails on what I can say,” he added. To keep him from further irritating the government, Hayes had hired an expensive roster of legal and PR advisers, one of whom monitored all our conversations via Zoom, piping up every time my questions approached “dangerous” territory. Finally, after asking Hayes to talk about a low point in his life — surely there must have been one in the years he spent fighting the government and losing his freedom? — he offered something. “Maybe the least enjoyable thing is sitting in a management meeting and dealing with other people’s issues,” he said. “When I go into the office sometimes and I leave my door open — like, Oh, shit, I shouldn’t have done that.” He said that temperamentally he was better suited to being a writer than a CEO.

Hayes knew that when he left the U.S., he would probably never return. “I don’t plan on being back in the U.S. pretty much ever,” he said. “I’m gone.” He listed superficial complaints — jet lag, American food — but it was clear he’d come to despise his home country on a deeper, cultural level.

He has spent the past six weeks in Hokkaido. He prefers to ski alone, in neon-hued gear, enjoying the peace of a solitary chairlift. “I don’t know if I have an overarching vision for the future,” he said one morning. “It’s just, like, Survive. Don’t lose people’s bitcoin.” Hayes insisted he was not enjoying the collapse of FTX and the pall it cast on all of crypto. “I didn’t want this to happen,” he said. “This is not an ideal situation for us.” He was also careful not to suggest that FTX overtook BitMEX because of Bankman-Fried’s alleged fraud. “We let somebody come into our house and take our money that we should have earned,” he said. “Hiding behind, like, ‘Sam was a shady guy; that’s why they beat us’ — that’s not the case. We beat ourselves.”

Reed is more plainly bullish on the possibility that BitMEX could reclaim some of its market share. “Let’s call it a comeback, yeah,” he says. Hayes publicly stepped back from the company during his legal battle and says he’s now just a board member with no plans to retake the CEO job. (He might not even be allowed to in some jurisdictions.) Behind the scenes, he’s still in control, according to people familiar with his moves. “When they pleaded guilty, Arthur moved in extremely bossish,” one of the people says. “It became clear that he just wants BitMEX back — and back like it was in the old days.”

At the moment, though, BitMEX is still on a downward trajectory. It’s done two rounds of layoffs in the past year. The CEO appointed to replace Hayes was dismissed in October and is now suing the company in Singapore for wrongful termination; the current CEO is the chief financial officer, Stephan Lutz.

There is one indication that BitMEX has entered a new era: There are no more sharks in the office. While Hayes was dealing with his case, the sharks outgrew their own confinement — a rectangular tank that didn’t allow them to swim in a circle. They were in a sorry state, according to someone who saw them, bumping and fighting, leaving bite marks on their flesh. Eventually, one shark killed another shark, and one died of natural causes. BitMEX executives donated the survivor. When I spoke with Hayes, he didn’t even know they were gone.

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