100x Group Reshuffles Execs As Arthur Hayes & Co Face Prison (UPDATED)
Following the recent regulatory crackdown on major crypto exchange BitMEX, Arthur Hayes and Samuel Reed stepped down from "all executive management responsibilities" in the 100x Group which they founded, and which is the holding group for HDR Global Trading Limited, owner and operator of the exchange. (Updated at 09:27 UTC: updates throughout the entire text).
"Founders Arthur Hayes and Samuel Reed have stepped back from all executive management responsibilities for their respective CEO and CTO roles with immediate effect. With fellow Founder Ben Delo, they will not hold executive positions in the 100x Group," said the latest BitMEX announcement on the changes in 100x Group leadership.
Greg Dwyer will take a leave of absence from his role as Head of Business Development.
Furthermore, Vivien Khoo, Chief Operating Officer of 100x Group, will become Interim CEO, gaining "additional operational responsibilities"; while Commercial Director Ben Radclyffe will have "enhanced responsibility" when it comes to handling client relationships and oversight of financial products.
"These changes to our executive leadership mean we can focus on our core business," commented David Wong, Chairman of the 100x Group. Wong added that the group has "an exceptional senior leadership team," and that it's "business as usual for us."
As reported, last week, three owners of BitMEX and five related companies have been charged by the US Commodity Futures Trading Commission (CFTC) with operating an unregistered trading platform and violating multiple regulations.
Arthur Hayes and Samuel Reed are among the individuals who operate BitMEX’s platform through "a maze of corporate entities" as the CFTC described it, stating that, at the direction of the operators, BitMEX has illegally offered leveraged retail commodity transactions, futures, options, and swaps on cryptocurrencies. The US Attorney for the District of New York indicting Hayes and Reed, along with Dwyer and Delo, on federal charges of violating the Bank Secrecy Act and conspiracy to violate the Bank Secrecy Act, each of which carries a maximum penalty of five years in prison.
While Reed was arrested promptly, the other three remained at large, per the Department of Justice.
As reported, BitMEX’s funds are held in multisig wallets that require a signature from multiple private keys in order to be unlocked. BitMEX’s three founders each hold a key, and two of three partners must sign each withdrawal. The company did not specify how has the management changes affected this. Cryptonews.com has contacted BitMEX for comment.
BitMEX said they intend to "defend the allegations vigorously," adding that they have "always sought to comply with applicable US laws, as those laws were understood at the time and based on available guidance."
The regulator was investigating whether BitMEX broke rules by allowing Americans to trade on the platform, which isn’t registered with the agency, already in July 2019.
As previously reported, HDR Global Trading created this new holding company structure, 100x, in July this year, which includes all assets of HDR, including BitMEX.
All four men - Hayes, Reed, Dwyer, and Delo - are named as 100x Group co-founders on its website. It also describes 100x as "the result of the phenomenal success of BitMEX," formed to "reshape the modern digital financial system into one which is inclusive and empowering." Its portfolio includes the flagship exchange and venture fund 100x Ventures with holdings in projects like MaiCoin, Merkle Science, PDAX, and the Sparrow exchange.