BitMEX Shuts Down: How Hayes Single-Handedly Saved Perpetual Contracts, and the Founder Was Predicted to Go to Prison
The closure of BitMEX has sparked a wave of nostalgia among crypto industry veterans. This is not just an exchange — it is the cradle of perpetual contracts (perps), a product that all competitors later copied. Over 11 years of operation, the platform did not lose a single satoshi due to hacks, but its history is full of drama and unexpected twists. Let's break down the key moments.
How the perp almost got deleted in the first month
Three developers created the perpetual swap in May 2016. It is a futures contract with no expiration date: a position can be held indefinitely, and the price is maintained by the funding rate — periodic payments between buyers and sellers. In the very first month, the product nearly died. The market was functioning so poorly that one of the founders wanted to simply delete the development. The situation was saved by Arthur Hayes. It was he who talked his colleague out of deleting it and over the weekend fixed the funding rate — the mechanism that keeps the perpetual contract price aligned with the spot price. The market still feels the outcome of that argument today: every perpetual contract on every crypto exchange exists thanks to Hayes' decision.
The prodigy predicted to become a millionaire and go to prison
A separate story involves one of the platform's co-founders, Ben Delo. According to Rand Group, as a child, he was expelled from three elementary schools. At Oxford, his classmates predicted two potential futures for him: they recognized him as the most likely candidate to become a millionaire and the second most likely to end up behind bars. In the end, as experts note, both predictions came true. Delo indeed amassed a fortune but also faced legal troubles. One commentator compared the company's journey to the early history of Stripe: first chaos, then an infrastructure that everyone else copies.
Tuition fees paid live
The contrast between luxury and pain was also felt in the company's daily life. The team rented the 45th floor of one of Hong Kong's most expensive towers, right next to Goldman Sachs. At the same time, their own users were "burning" on 100x leverage. Many did so in their pajamas at four in the morning, which became a symbol of the era. This is the experience veterans recall most often. One trader called BitMEX a place that taught an entire generation about risk management, charging "tuition fees paid live." Many shared their stories of losses. One user recalled staring at a zero balance at three in the morning in 2018, while another claimed that from December 2017 to March 2018, he lost almost his entire portfolio of 30 BTC. According to the latter, during extreme volatility, neither the stop-loss nor the close order worked on the exchange, leading to his liquidation. This claim cannot be verified, but the sentiment — "the most expensive lesson in life that made me a better trader" — was widely shared in the comments.
Analyst's opinion: The story of BitMEX is a clear example of how chaos and genius go hand in hand in cryptocurrencies. Hayes didn't just save a product; he created the foundation for all modern derivatives trading. But the closure of the platform marks the end of an era when the market was wild and rules were just being formed. Regulated giants are taking over, but the spirit of the pioneers, unfortunately, is leaving with BitMEX.