Rise and Fall of Black Crypto Billionaire Arthur Hayes

[DrBanneker]

I've known about breh for a while having been doing BTC stuff since 2015-16. He was a co-founder of one of the big exchanges, BitMex and is a regular ADOS breh from Detroit. Became a billionaire and lived large and now the feds are trying to bring him down.

Unfortunately the Feds see crypto as a threat so this would probably happen anyway but also let this be a lesson to brehs:

No matter how successful you get, never think you can move like White boys. Keep your profile basic and do not flaunt your shyt.

The Rise and Fall of Bitcoin Billionaire Arthur Hayes; Full article from Vanity Fair; excerpts below READ THE FULL ARTICLE

Arthur Hayes lives large. Like Bobby Axelrod-in-Billions large. Just replace New York with Hong Kong and infuse it with a dose of Silicon Valley—where unicorns spring from the minds of irrepressible company founders—and, well, you get the picture. One minute Hayes is hitting the powder in Hokkaido, the next he’s crushing it on a subterranean squash court in Central—Hong Kong’s Wall Street. And all the while he keeps one eye trained on an obscure-sounding currency exchange that he built out of thin air and through which more than $3 trillion has flowed.

Screen-star handsome and fabulously wealthy, the African American banker turned maverick personifies the contemporary fintech pioneer. But the feds describe Arthur Hayes differently: a wanted man who “flouted” the law by operating in the “shadows of the financial markets.” Hayes’s indictment was unsealed in October, and he remains at large in Asia as prosecutors in New York hope to arrest him and try him on two felony counts, which carry a possible penalty of 10 years in prison.

This is a tale of new money versus old, financial whiz kids upstaging banking’s old guard, and American authorities attempting to apply 20th-century laws to 21st-century innovation. Prosecutors allege that Hayes and his business partners violated the Bank Secrecy Act by failing to implement and maintain an adequate anti-money-laundering program—to weed out bad actors and dirty money. Meanwhile, Hayes’s colleagues in the cryptocurrency world believe he is being punished for building an ingenious product that has baffled lawmakers, bedeviled regulators, and—once it became wildly popular—posed a threat to some of the markets’ biggest players. Adding to the chorus of voices are some high-powered legal experts who consider the case United States of America v. Arthur Hayes to be largely unprecedented.

At a time when the SEC is seemingly doing the bidding of Wall Street titans—eager to punish the unwashed masses of day traders for scuttling banks’ and hedge funds’ trading positions on GameStop and other stocks—Hayes might just be patient zero when it comes to exposing the hypocrisy in high finance that is now coming into sharp relief.

Born to middle-class parents who worked for General Motors and were beholden to the ever-changing fortunes of the auto giant, he split his formative years between Detroit and Buffalo, where his mother, Barbara, moved mountains to get her gifted son into Nichols School, a leafy private institution founded in 1892. “He succeeded at everything, from his studies [to] the sports field, to making lasting friendships,” reads a testimony, featuring Barbara, on one of the fundraising pages of the school’s website. “Nichols gave him the setting, the stimulation, and at one point, the scholarship to thrive.” Hayes, in return, has given back: underwriting a scholarship that ensures “a deserving student will be able to experience the excellence of a Nichols education and the lifelong benefits it brings.”

The birth of BitMEX six years ago was perfectly timed—yet dangerously fraught. In the eyes of U.S. authorities, Bitcoin was then transitioning from being the favored currency of bad actors (exemplified by the 2013 takedown of Silk Road, the notorious black market for drugs and guns-for-hire) to being an investment-grade asset that institutional players were starting to buy as a safeguard against inflation—and for its promise of outsize returns. Hayes, Delo, and Reed were in the catbird seat and began to accumulate serious wealth. (All three are billionaires, according to sources familiar with their finances.)

After attending the Wharton School of business, he headed off to Hong Kong, where he worked at Deutsche Bank and Citibank as a market maker for exchange-traded funds, or ETFs—hybrid securities that, not unlike mutual funds, diversify an investor’s risk but can be traded like stocks. Hayes was just hitting his stride when a pink slip arrived in May 2013. “Bankers tell you everybody has a bullet with their name on it,” he explained one afternoon over tea at the Marina Bay Sands in Singapore—the iconic hotel featured in the finale of Crazy Rich Asians. He was wearing his standard attire: skintight T-shirt, jeans, and a pricey timepiece (a Hublot Big Bang). “I wasn’t married, had no kids, no obligations. I had been an investment banker, so I wasn’t sleeping on the streets. I wanted to build something.”

Don't Stunt

In May 2018, on the opening day of Consensus—the crypto world’s equivalent of the Consumer Electronics Show—Hayes pulled up to the Hilton in midtown Manhattan in an orange Lamborghini and tweeted: “Did you see my ride today at #Consensus2018 ?”

A close friend insisted he was simply lampooning the thousands of attendees gathered inside the hotel—investors who talked a big game about cashing in on crypto, but who had really only succeeded in burning through millions in venture capital on harebrained schemes and ICOs (initial coin offerings). Still, looking back, the Lambo gambit might well have been the moment, more than any other, when Hayes painted a bull’s-eye on his back.

Also read the Nouriel Roubini exchange. Breh wasn't wrong but he should have moved more carefully.

Feds treat us different

The criminal case has stunned legal observers. “I’m not aware—and I’ve done this for a really long time—of any other criminal indictment, and certainly not one targeting individuals, that is solely based on anti-money-laundering-program failures,” maintained Laurel Loomis Rimon, an expert in financial crimes who spent 16 years with the Justice Department and prosecuted its very first digital-currency case. Now in private practice at O’Melveny & Myers, she advises cryptocurrency and blockchain companies. Like other DOJ veterans I spoke with, she was struck by the absence of more substantive charges. “In an indictment you usually see allegations of specific criminal activity, whether it’s fraud, credit card theft, child pornography, terrorist financing. You don’t see any allegation of any of those things in this indictment.”

I hope the breh pulls through but remember, we can be outspoken but we get treated differently

 

[Be Strong Blackman]

move in silence

 

[DrBanneker]

move in silence

Exactly, you can do things but we gotta do it differently. Sad world, but some rules we didn't make.

 

[humminbird]

yeah I've been following this

 

[old pig]

damn

 

[duncanthetall]

That was a good read. Different set of rules for crypto folks than the bankers. shyts fukked up

 

[Threnody]

fukked up

As a black man you gotta move like you behind enemy lines w/ special privileges that can get taken away at any time

 

[ORDER_66]

Man fukk the feds...

 

[King]

Wow, props to breh for seeing an opportunity and taking it.

Hopefully, there is more opportunity in store for the rest of us with that ambition.

 

[BlackJesus]

So they aren’t charging his other co-founders too??? Just him? And money laundering at that? What in the actual fukk?!!! Am I missing something?

How is he solely responsible for what other people did on his exchange?

 

[Afro]

So they aren’t charging his other co-founders too??? Just him? And money laundering at that? What in the actual fukk?!!! Am I missing something?

How is he solely responsible for what other people did on his exchange?

We almost need to burn this entire hypocritical, racist shyt down

All of them are getting charged, they already got two of them (one of the founders and their first employee)

 

[ORDER_66]

So they aren’t charging his other co-founders too??? Just him? And money laundering at that? What in the actual fukk?!!! Am I missing something?

How is he solely responsible for what other people did on his exchange?

He needs to countersue in the billions...

 

[Swirv]

I remember an article back in 2018 that bitmex was rigged. After reading that I never thought about them again. Seems like the US is going to make an example out of these dudes.

 

[Amestafuu (Emeritus)]

fukked up

As a black man you gotta move like you behind enemy lines w/ special privileges that can get taken away at any time

never get comfortable. dudes always think they playing with the same rules... nah

 

[Amestafuu (Emeritus)]

Wow, props to breh for seeing an opportunity and taking it.

Hopefully, there is more opportunity in store for the rest of us with that ambition.

He needs to countersue in the billions...