Crypto

Crypto Billionaire Arthur Hayes And BitMEX Buy Large German Bank To Expand


A company founded by the current CEO and chief financial officer of cryptocurrency exchange BitMEX has announced plans to buy one of Europe’s oldest banks and establish a one-stop-shop for regulated crypto products in Germany, Austria, and Switzerland.

BXM Operations AG, founded by BitMEX CEO Alexander Höptner and CFO Stephan Lutz, plans to buy Bankhaus von der Heydt, a bank located in Munich, Germany, subject to approval by BaFin, the German financial services regulator.

Launched in Hong Kong in 2014, BitMEX was co-founded by African American crypto pioneer Arthur Hayes, becoming one of the earliest and largest crypto derivatives exchanges. A graduate of Wharton Business School, Hayes is himself a former banker and equities trader for Citigroup Inc in Hong Kong. He became the CEO of BitMEX, which claims to transact the equivalent of billions of USD every day.

Hayes and fellow BitMEX co-founders Ben Delo and Samuel Reed were indicted in 2020 on charges of violating the U.S. Bank Secrecy Act. Hayes was accused of failing to take steps to prevent BitMEX from being used for money laundering and of operating the exchange from the U.S. for at least six years, unlawfully accepting orders and funds from U.S. investors to trade cryptocurrencies without regulator clearance.

In July 2020, BitMEX established 100x, the holding group for HDR Global Trading Limited and its assets, including the BitMEX platform. It operates out of Seychelles.

Some crypto enthusiasts called out the Feds for double standards when dealing with the Black crypto-billionaire.

“While banks are fined for mistakes such as not developing strong enough controls to stop money laundering on their platform, Arthur Hayes was arrested for it and could face jail time,” tweeted Dare Obasanjo, technology leader at Microsoft, in a July 2021 tweet. “A double standard as banks are fined not arrested for this.”

In August 2021, BitMEX announced that it would pay a $100 million penalty to settle civil charges with the Commodities Futures Trading Commission and Financial Crimes Enforcement Network — one of the largest settlements ever against a cryptocurrency exchange.

BitMEX Group said in its press release that it wants to become a strong player in Europe in addition to its global ambitions.

The company recently launched BitMEX Link in Europe, an innovative brokerage service based in Switzerland that facilitates trading in digital assets. The bank acquisition is the next step in its European expansion and product development, it said in a press release.

Hayes also announced in a tweet on Dec. 21 that BitMEX is launching its own token, BMEX — “The Token for True Believers”. BMEX tokens won’t be offered to people in the U.S. and other restricted jurisdictions, and won’t be tradeable by people in the U.S. The upcoming BMEX token will be airdropped by Feb. 1, 2022.

The token launch could help revive BitMEX’s trading volumes, which took a beating in the last few months, The Block Crypto reported in December 2021.

BXM Operations AG and Bankhaus did not disclose the purchase price or other financial details of the bank buying transaction. The bank will continue to be operated as a standalone business with Höptner and Lutz, both German business veterans, on its supervisory board.

“Germany, as the largest economy in Europe, combines an innovative approach to digital assets with strong regulatory oversight and rule of law – making it a prime market for BitMEX’s expansion in Europe,” Lutz said in a prepared statement.

“Through combining the regulated digital assets expertise of Bankhaus von der Heydt with the crypto innovation and scale of BitMEX, I believe we can create a regulated crypto products powerhouse in the heart of Europe,” Höptner said.

The news of BitMEX owning a bank was not greeted with universal applause on Twitter.

“Very ambiguous news,” tweeted lupita. “On the one hand, this is a productive step. On the other hand, crypto, unlike banks, is created for free trade.”

However, congratulatory comments on Twitter suggested that BitMEX continues to be seen as a pioneer.

“No doubt in my mind that most major banks will eventually be bought by a crypto exchange” tweeted Marta Calvinho.

“Probably nothing, just buying a bank for Bitcoin” Apifiny tweeted.

“New fin buying old fin. This will probably happen more throughout 2022” GoncaloMagalhaes tweeted.

“I think crypto back to acquiring more banks will eventually achieve decentralized finance, which is the ultimate goal” Chen Xiaolin tweeted.

Photo: Arthur Hayes, co-founder of BitMEX, by Bloomberg / Getty 

READ MORE ABOUT ARTHUR HAYES HERE

Listen to GHOGH with Jamarlin Martin | Episode 74: Jamarlin Martin Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble?



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