BitMEX’s Founder Arthur Hayes’ “Coconut” Bribery Joke Was Cited By Prosecutors As A Proof

Prosecutors cited a joke Arthur Hayes made about using a coconut to bribe officials in the Seychelles, where BitMEX is situated, as proof of his aim to avoid regulation when BitMEX co-founder Arthur Hayes was accused of permitting money laundering on his crypto trading platform in 2020.

However, U.S. District Judge John Koeltl barred the government from commenting on the “coconut” joke during Hayes’ and other BitMEX executives’ criminal trial in March.

“There’s no evidence of bribery in the Seychelles, and plainly the relevance of the segment is outweighed by the danger of unfair prejudice,” John Koeltl said.

Nouriel Roubini, an Iranian-American economist, charged cryptocurrency exchanges with breaking the law by operating in regions with limited control. However, Hayes defended the company’s decision to be in the Seychelles, claiming that BitMEX is subject to rules even though it is not based in the United States.

When questioned if he recognized that regulators in the Seychelles were “on a different scale” than those in the United States and other nations, Hayes said that “it just costs more to bribe them” in those jurisdictions. When the event host asked Hayes how much he spent to bribe authorities in the Seychelles, he replied, “a coconut.”

Arthur Hayes, a former equities trader for Citigroup Inc. in Hong Kong, co-founded BitMEX in 2014 with Benjamin Delo, an Oxford-educated computer scientist who formerly worked for JPMorgan Chase & Co., and Samuel Reed, a web application programmer. The three men will stand trial on the charges on March 30, while Gregory Dwyer, the company’s first employee and former head of business operations, will appear in court separately in October.

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