Tag: Arthur Hayes

BitMEX Co-Founder Proposes Bitcoin-Backed Stablecoin

by Blockchain News

Even if authorities are increasing their scrutiny of stablecoins, the community’s persistent interest in stablecoins that are not related to the U.S. dollar is illustrated by Hayes’ idea for the NakaDollar. NakaDollar would be a stablecoin that would not be tied to the dollar. The proposed stablecoin differentiates itself from major reserve-backed stablecoins such as Tether (USDT) and USD Coin by relying on derivatives markets that offer liquid inverse perpetual swaps rather than US dollar reserves as its backing mechanism. This is in contrast to major reserve-backed stablecoins such as Tether (USDT) and USD Coin. This stands in stark contrast to the two big stablecoins that came after it. These sorts of deals are referred to as “liquid inverse perpetual swaps” which is a fancy term for them (USDC).

The combination of short BTC holdings and USD inverse perpetual swaps would serve as the stablecoin that Hayes has suggested using as its underlying structure. In order to maintain the stablecoin’s 1:1 peg to the United States dollar, transactions based on mathematics would be conducted between the new NakaDAO and allowed parties and derivatives exchanges. These transactions would be necessary. The viability of the proposed stablecoin would be contingent on their being both the availability and the liquidity on derivatives markets to engage in the trading of inverse perpetual swaps. This is an essential prerequisite that must be met before the introduction of the stablecoin.

As the cryptocurrency industry continues its unyielding quest of perfection, it is virtually guaranteed that new concepts for stablecoins will emerge at some time in the near future. This might take the form of a new product or an improvement on an existing one. Yet, the regulatory framework that stablecoins operate under is also going through a period of transition. In light of this, it is of the utmost importance that stablecoin issuers make compliance and transparency their top priority in order to both attract investors and stay in line with the regulations that are now in place.

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The Launch of CBDC May Destroy Bitcoin – Arthur Hayes

by Blockchain News

Arthur Hayes, one of the industry’s well-known trading and crypto veteran who doubles as the Co-founder of the BitMEX exchange, has given his view on what he thinks will happen to Bitcoin if the majority of Central Bank Digital Currencies (CBDCs) is eventually launched.

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According to a press release, Hayes has called the CBDC “pure evil.” His point of view is based on the notion that the CBDC will grant the government total influence over amending legislation relating to numerous subjects, like the use of Bitcoin. 

He claimed that CBDCs directly infringe upon the right of individuals to self-govern fair trades with one another. He went on to say that the CBDC will affect the banks by posing an existential threat to their capacity to conduct business.

He also stated that he believes the government will be able to quickly replace fiat currency with CBDC because of the indifference of the population, bringing in a nightmare of financial surveillance. However, he hinted that the domestic commercial banks can act oddly as an accomplice to prevent the government from putting the best CBDC architecture for suffocating the populace into place.

Hayes also underlined that the government is trying to use CBDC to fight economic inflation, but he claims that doing so could hurt the general population by hurting the blockchain industry. The inflation that will soon be felt, according to him, will be significantly different from what the economy has seen over the previous 50 years, so he merely hopes that employing CBDC will be successful.

The Dominance of CBDC as an Instrument of Trade

A CBDC is a type of legally recognized digital currency, also known as “digital cash”. It is fundamental money, just like real money, and liability of the central bank. 

So many countries have begun testing the use of CBDC by using it to make payments for goods and services. For example, the government of Canada has begun consultations on how to use the CBDC. Deputy Prime Minister Chrystia Freeland recently released a government statement with a focus on digital assets and currencies and their use worldwide.

Additionally, it has been reported that the Central Bank of the United Arab Emirates (CBUAE) wholesale CBDC Pilot Program is now complete.

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Embattled BitMEX Co-Founders to Pay $30M in Civil Fine

by Blockchain News

The United States District Court for the Southern District of New York (SDNY) has pronounced a combined Civil monetary fine of $30 million for the three embattled BitMEX exchange co-founders indicted for violating the US Bank Secrecy Act. 

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The co-founders include Arthur Hayes who served as the Chief Executive Officer until the investigations started, Benjamin Peter Delo, and Samuel Reed.

As announced by Commissioner Johnson of the Commodity Futures Trading Commission (CFTC), the fine was pronounced in the form of a Consent Order, and each of these founders will be required to pay $10 million each. The CFTC picked up the enforcement actions against the trio for running the BitMEX Exchange in the United States without receiving the appropriate licenses.

Hayes and his colleagues were accused of failing to implement the relevant Anti-Money Laundering (AML) measures as well as Know Your Customer (KYC) procedures. 

Speaking with respect to the Consent Order, Commissioner Johnson said “the mission of the Commodity Futures Trading Commission is to promote the integrity, resilience, and vibrancy of the U.S. derivatives markets through sound regulation.” He noted that the commission has the powers of the US Congress to carry out its mission as the legislature “authorizes the CFTC to promote responsible innovation and fair competition in our markets.” 

He added;

“This case highlights the significance of cryptocurrency derivatives platforms operating in the United States, particularly those permitting U.S. customer participation; such platforms must comply with the Commodity Exchange Act and the Commission’s regulations. To remain competitive in global financial markets, our derivatives markets must continue to innovate, particularly in emerging digital asset markets. It is imperative, however, to balance responsible innovation with core principles, including consumer protection, transparency, and fairness.”

BitMEX got freed from the regulator back in August last year when it paid $100 million for related charges. While the CFTC is stern with respect to its enforcement actions, it also claims it is in support of a full innovative drive in the crypto ecosystem.

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Former BitMEX CEO Arthur Predicts $30K Price Target for BTC by June

by Blockchain News

In tandem with his call for a “crypto carnage” that is underway in the second quarter, former BitMEX Chief Executive Officer Arthur Hayes has predicted a price slump of $30,000 for Bitcoin (BTC) and $2,500 for Ethereum (ETH) by the end of June this year.

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Backing the Bearish Narratives

Hayes is a veteran in the crypto investing game, and his prowess is well showcased in the BitMEX derivatives exchange which he co-founded. While tagging himself as a long-term crypto investor, Hayes believes the prices of BTC, ETH, and other cryptocurrencies have grown so much in the past weeks that a reversal is imminent.

According to Hayes, the strong correlation between Bitcoin and the Nasdaq 100- an index of top tech stocks in the U.S., is enough grounds for the impending reversal that may befall the leading coin. He shared a series of chats that showed the high correlation with these stocks, and he said that a reversal in trend from these stocks is bound to stir a corresponding drawdown in the price of Bitcoin and Ethereum.

With the effects of the coronavirus clearing across the board, Hayes also argued that the introduction of higher interest rates by the Feds bolsters the outlook of the Nasdaq 100 as a curb against inflation (which naturally favours crypto) will have a tremendous bearish impact on the digital assets.

The war in Ukraine also comes as a major bearish factor that will eventually hurt the price of stocks and, by extension, cryptocurrencies.

Proposed Solutions

While issuing a disclaimer that his commentary is not to be taken as an investment decision, Hayes said he is bullish in the long term, but buys cheaper cryptocurrencies alternatively with a good propensity for growth in the long term.

He also said he is buying put options in the short term, a move that will remain in his favour irrespective of the market trend.

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BitMEX Founder Arthur Hayes Pleads Guilty to Violating Bank Secrecy Act

by Blockchain News

BitMEX co-founders Arthur Hayes and Benjamin Delo have both pleaded guilty to violating the United States Bank Secrecy Act (BSA).

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As announced in a press release by the Department of Justice, the plea detailed the duo’s failure to establish, implement and maintain Anti Money Laundering (AML) safeguards on the BitMEX trading platform and per the plea deal, both can be sentenced to a maximum jail term of 5 years.

“The opportunities and advantages of operating in the United States are legion, but they carry with them the obligation for those businesses to do their part to help in driving out crime and corruption,” said U.S. Attorney Damian Williams, “ Arthur Hayes and Benjamin Delo built a company designed to flout those obligations; they willfully failed to implement and maintain even basic anti-money laundering policies.  They allowed BitMEX to operate as a platform in the shadows of the financial markets.

BitMEX was one of the flagship derivatives trading platforms that ventured into the digital currency ecosystem, however, its early days were marked with controversies and crackdowns from market regulators, particularly those in the United States. While the Commodity Futures Trading Commission (CFTC) charged the exchange for illegal trading back in October 2020, BitMEX has never left the crosshairs of the SEC for its securities trading.

Per the current charges levied on the founders, Arthur Hayes agreed to surrender to the authorities back in March last year, a bold move that was soon followed by Delo and Samuel Reed who initially was seemingly on the run from authorities.

Following the current plea deal, Arthur Hayes and Benjamin Delo have each agreed to separately pay a $10 million criminal fine representing pecuniary gain derived from the offense. Their final sentencing is subject to the prerogative of the presiding U.S. District Judge John G. Koeltl.

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Bitcoin Won’t Bottom Until It Retests $28,500, Believes BitMEX Co-Founder Arthur Hayes

by CryptoPotato

Arthur Hayes – co-founder of BitMEX – just gave an interesting Bitcoin price forecast in his bi-weekly analysis. Despite his expectations that the Federal Reserve won’t raise interest rates, he still doubts Bitcoin’s bottom will arrive until a $28,500 retest.

Calling the Fed’s Bluff

In BitMEX’s latest post from Crypto Trader Digest titled “Bottomless,” the former CEO extols cryptocurrencies as the “last free market on earth”. He explained that due to “wanton” money printing, large banks and governments are able to capture other asset prices at “politically expedient levels”.

Afterward, he recognizes that while cryptocurrencies are down significantly in recent weeks, the Federal Reserve hasn’t even raised rates yet. Therefore, he suspects that there could be more carnage to come in the markets when March’s expected rate-hike actually arrives.

However, he also expressed doubt as to whether the Fed actually has the ability to raise rates without blowing up the markets.

“If the Fed publicly stated it will contract the size of its balance sheet, then how can it maintain its pledge to backstop corporate issuers?” said Hayes. “The market has woken up to this inconsistency, and yields have begun a small breakout to the upside.”

Hayes predicts the Fed will opt to continue easy monetary policies out of political expediency, despite its claims to the contrary. As history has proven, news of rising inflation tends to be a positive for Bitcoin’s price.

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Another FOMC meeting will take place later today, which markets await anxiously. Hayes suggests that investors not wait for the Fed to announce it has changed its mind, and to expect crypto to pick up “well in advance” of that.

Floor Below $29k?

Hayes sees Bitcoin’s next true resistance level at $28,500 – approximately where it bottomed in July of last year. Should this level be broken, he expects a liquidation cascade that could possibly take Bitcoin back down to $20k – its 2017 high.

“If either of Bitcoin’s 2017 and Ether’s 2018 previous ATH ($20,000 and $1,400 respectively) are breached on a daily candle, then I don’t even want to think about it,” he said.

Bitcoin is currently trading above $38k – a significant rebound from its low at $33k days ago.

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Judge scolds BitMEX lawsuit plaintiffs for offering him crypto ‘basics’ lessons

by Cointelegraph

The California District Judge overseeing a racketeering suit filed against crypto derivatives exchange BitMEX, William H. Orrick, has rebuffed the plaintiffs’ motion offering to provide them with a tutorial on “cryptocurrency basics.”

According to a July 13 report from Law360, the judge responded to Bitcoin Manipulation Abatement LLC (BMA)’s proposal with a one-page order on Tuesday, outlining the offer was “not well taken.”

“Plaintiffs believe that cryptocurrency tutorial will benefit the court. I think not,” Judge Orrick wrote, adding that the plaintiffs should “focus on the task at hand — convincing me that they have stated a plausible claim.”

BMA’s complaint was first filed in May 2020, just weeks after the firm filed lawsuits against Ripple and FTX. The suit against BitMEX is now in its fourth iteration.

The plaintiffs allege that BitMEX’s former parent company, HDR Global Trading Limited, and executives Arthur Hayes, Ben Delo, and Samuel Reed deliberately designed the exchange to “engage in, facilitate, aid, abet, counsel, induce and/or procure a myriad of illegal activities.” BMA alleges BitMEX carried out racketeering, money laundering and wire fraud.

A previous version of the suit was dismissed without prejudice in March. BitMEX has staunchly rejected BMA’s claims.

The United States Department of Justice has accused Delo, Hayes, Reed and BitMEX head of business development Gregory Dwyer of violating the Bank Secrecy Act, having filed complaints against the group in October 2020.

Reed was arrested the same month, while Delo and Hayes voluntarily surrendered to authorities in March and April respectively, before being released on bail. The trio will face trial in March 2022, with Dwyer remaining at large.