Arthur Hayes

Arthur Hayes is an American former equity derivatives trader who co-founded BitMEX in 2014 and, with it, popularised the perpetual swap, the contract that now accounts for the overwhelming majority of crypto trading volume worldwide. He pleaded guilty to a Bank Secrecy Act violation in 2022, and President Donald Trump granted him a full and unconditional pardon on March 28, 2025. He now runs the family office Maelstrom and writes the most widely read macro essays in the industry.

The Perpetual Swap Is the Contribution

If you strip away the personality, Hayes's lasting legacy is a financial instrument, and it is worth understanding why it mattered.

Traditional futures expire. That creates constant friction for anyone who wants sustained leveraged exposure, because positions must be rolled forward at each expiry, incurring cost and basis risk. Hayes and his co-founders built a contract with no expiry date at all, held to the spot price by a funding rate: when the contract trades above spot, longs pay shorts periodically, and when it trades below, shorts pay longs. That recurring payment is what tethers a perpetual instrument to the underlying without ever settling.

The design solved a real problem and it proved enormously popular. Perpetual futures are now the dominant crypto derivative, offered by Binance, Bybit, Deribit and every significant venue, and reproduced on-chain by decentralised exchanges. A very large share of the market's daily turnover trades through a contract structure that a small Hong Kong startup invented.

BitMEX also offered up to 100x leverage on it, which is the other half of the legacy and a considerably less flattering one. At that multiple a price move of about one percent against a position wipes it out entirely, and the exchange's own liquidation engine closes it. The instrument was a genuine innovation; the leverage settings attached to it were a retail hazard.

BitMEX at Its Peak

For several years in the late 2010s BitMEX was where crypto price discovery happened. Its XBTUSD perpetual was the most liquid Bitcoin instrument in the world, its liquidation feed was watched as a market signal in itself, and the phrase "BitMEX liquidations" described a recognisable market event in which cascading forced closures moved the spot price of Bitcoin rather than merely tracking it.

That influence rested on a deliberate choice: BitMEX did not perform identity verification. Anyone with an email address and crypto could open an account and take 100x leverage, with no know-your-customer process and no jurisdiction check. It was an enormous commercial advantage, it made the platform accessible to traders excluded from regulated venues, and it was the basis of the criminal case.

Hayes was, throughout, an unusually visible chief executive: combative on social media, contemptuous of traditional finance, and given to a flamboyance that made him a personality as much as an operator. He had come to crypto from equity derivatives desks at Deutsche Bank and Citi in Hong Kong, and the trading-floor manner never left. That persona is part of why BitMEX grew as fast as it did, and part of why its regulatory posture went unexamined for as long as it did.

The Case, and the Pardon

In 2020 US prosecutors charged Hayes, co-founders Ben Delo and Samuel Reed, and senior employee Greg Dwyer with violating the Bank Secrecy Act. The allegation was not fraud, market manipulation or theft of customer funds. It was the absence of an anti-money-laundering programme: BitMEX had served US customers while marketing itself as a venue where trading was effectively anonymous, and had not implemented the controls a US-facing financial institution is required to maintain.

The three co-founders pleaded guilty in 2022, each agreed to forfeit USD 10 million, and each received probation rather than custody. Hayes stepped back from running the exchange.

On March 28, 2025, Trump issued full and unconditional pardons to Hayes, Delo, Reed, Dwyer and BitMEX's operating entity HDR Global Trading. Delo characterised it as vindication of the position they had always held, that they should never have been charged under what he called an obscure, antiquated law.

That framing is worth examining rather than accepting. The Bank Secrecy Act is neither obscure nor antiquated; it is the statutory backbone of US anti-money-laundering enforcement, and every regulated financial institution complies with it. BitMEX ran a leveraged derivatives venue for US persons without those controls, which is a straightforward breach, and the guilty pleas were entered voluntarily. The pardon removes the convictions. It does not establish that the conduct was lawful, and the distinction matters on a page about a living person.

Maelstrom and the Essays

Hayes now serves as chief investment officer of Maelstrom, his family office, which invests across early-stage crypto projects and infrastructure. The fund has been an active participant in early token rounds, and Hayes has used his platform to discuss positions it holds, which is disclosed but still worth registering when reading his conclusions.

He is better known for his writing. His long-form essays combine macroeconomic argument with trading positioning, typically built around liquidity conditions, central bank balance sheets, fiscal deficits and currency debasement, and they reach an audience far beyond his former customer base. The recurring thesis is that Bitcoin is a liquidity asset whose price is driven principally by the expansion and contraction of dollar credit rather than by adoption narratives. On that view a chart of market capitalisation tells you less about crypto than a chart of central bank balance sheets does, and the same logic is applied to Ethereum and the rest of the market as higher-beta expressions of the same liquidity trade.

The essays are genuinely valuable as a framework and genuinely unreliable as prediction, and both things need saying. Hayes thinks in terms of flows and plumbing, which is a more rigorous lens than most crypto commentary applies, and he explains it in a way a non-specialist can follow. He is also directionally wrong with some regularity, makes confident short-term calls that do not land, and holds positions in the assets he discusses. The rhetorical style, deliberately provocative and heavy on obscenity and swagger, tends to lend the arguments more certainty than the analysis supports.

How to Read Hayes

Hayes is a useful thinker and a poor model. The perpetual swap was a real financial innovation, his liquidity framework is a better way to reason about crypto volatility than most of what circulates, and his essays are worth the time.

The platform he built also handed 100x leverage to anonymous retail traders with no verification and no suitability check, and the predictable result was a great many people losing everything on a venue optimised to let them. That is not a regulatory technicality; it is the product working as designed. Anyone taking his market views seriously should note that he made his fortune from the trading activity he encourages, and that understanding crypto exchanges includes understanding whose interests a venue's design serves.

Read the essays for the macro framework and ignore the conviction. Treat the pardon as a legal fact rather than a moral verdict. And take the leverage his exchange pioneered as a warning rather than an opportunity, because the funding-rate mechanism he invented is elegant precisely because it never lets you stop paying.