A MODERN CRYPTO-TALE. PART 1
The idea of the fortress.
Coo! It’s me again, Crypto Owl. I was thinking… Let’s do something different this Friday.
I have a fascinating story for you, and I’m going to make a few sequences. Just like in the movies. Shall we?
On Today’s Menu:
👨🍳 CHEF’S SPECIAL DISH: Arthur Hayes, his idea, and the others
🍦 DESSERT: Crypto News Around the Web
PART ONE: ARTHUR HAYES, HIS IDEA, AND THE OTHERS
In this and several upcoming newsletters, I’ll tell the story of billionaire Arthur Hayes and his company - the crypto exchange BitMEX, which once traded trillions of dollars. Why should this be interesting to you? Because this is one of the most extraordinary rise-and-fall stories in the crypto world.
First things first.
Arthur Hayes is crazy rich. Or, should I say, was. In May 2022, he was sentenced to 2 years in jail for money laundering. Hayes was a man that had it all - a tremendous wealth that few of us could ever dream of. If you’ve ever seen the movie “Billions”, remember Bobby Axelrod. Maybe that will help you to see the picture better. Just imagine that the action takes place in Hong Kong.
Arthur Hayes was born in 1985, in Detroit, Michigan, in a middle-class family. The breathtaking wealth wasn't that familiar for Arthur back then.
There’s a big gap between these two facts, which we must fill with the story of Arthur Hayes. How did he manage to become that successful? What people has he met in his life, and how did he find BitMEX, the world’s largest crypto exchange platform where trillions of dollars were traded?
Filling in between the lines
Arthur went to a private Nichols school. According to some sources, his mother did everything she could to give her son this opportunity. Hayes’ mother said, “he succeeded at everything, from his studies [to] the sports field, to making lasting friendships”. So, Arthur was a talented and smart kid, as we can see.
Later in his life, Arthur attended the Wharton School of Business and worked at several banks in Honk Kong as a market maker for exchange-traded funds. But, in 2013, Arthur found a new hobby - Bitcoin. At that time, cryptocurrencies were unknown territory for everyone, but Hayers wasn’t afraid of the unknown and continued to pursue his new passion.
Slowly but surely, Arthur went from being an amateur trader to a true crypto titan genius. He started small initially, using the arbitrage method of buying crypto cheap in one place and selling higher in another. Arthur held his coins at Mt.Gox, a Tokyo-based crypto exchange platform. However, in 2014, Mt. Gox was hacked ($500 million was stolen), but Arthur managed to withdraw his money in time. That was a lesson for him. And probably also an inspiration to create a platform where something like that can’t happen.
That idea grew like a small sprout in Arthur’s head, and he decided to start an online crypto exchange platform where people could trade their derivatives for Bitcoin and actually make money. But Hayes couldn’t do it alone, and he needed people who knew about specific things to make this idea work.
…and then Arthur met them.
In January 2014, Hayes met Ben Delo, a neat programmer and mathematician from the UK. As a child, Ben Delo was expelled even from three schools before he was diagnosed with Asperger’s syndrome. But that didn’t stop him from being accepted at Oxford. After graduating, Delo worked for IBM, two hedge funds, and, as he later moved to Honk Kong, at JPMorgan’s.
When Arthur told Ben about his idea to create an online exchange platform, Delo said they needed to find a front-end web developer. And Arthur knew one person for that.
That’s how Sam Reed, an American coder and tech evangelist, joined the gang. He signed immediately for the crypto exchange platform idea. Reed grew up in a house with plenty of old computers (maybe because of his parents’ jobs: his mother was a newspaper editor, and his father was a network administrator for the US Air Force). At the age of 12, Reed was able to fix various broken computers. Cool, huh? In addition, although Reed was the youngest, he has been active in the crypto world the longest. At the time, he was mining Bitcoin which was barely valuable (since 2009).
The trio started to bring Arthur’s idea to real life. They created an online crypto exchange platform and named it the “Bitcoin Mercantile Exchange”. And that’s how the BitMEX was born.
To be continued: Bitmex throughout the years and how it managed to become the biggest crypto exchange platform in the world by 2018.
CRYPTO NEWS AROUND THE WEB
FRESH DRINK
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Disclaimer: This newsletter is strictly educational. None of this information is intended to be financial advice. Always do your research and act responsibly with your profits.