BitMEX’s Greg Dwyer Pleads Guilty for Role in Money Laundering Case

The first employee of BitMEX cryptocurrency derivatives exchange Monday pleaded guilty to violating a U.S. federal anti-money laundering law by failing to put in place an anti-money laundering program. The US Attorney for the Southern District of New York disclosed the announcement on Monday.

Gregory Dwyer, who previously served as the head of Business Development at BitMEX, pleaded guilty to violating the Bank Secrecy Act for failing to establish, implement, and maintain an anti-money laundering program at BitMEX.

Dwyer, a 39-year-old citizen of Australia and Bermuda, entered his plea before U.S. District Judge John Koeltl in Manhattan.

As per the plea agreement’s terms, Dwyer agreed to pay a fine worth $150,000 fine and is set to spend five years in prison as a penalty for his crime.

In a statement, U.S. Attorney Damian Williams said: “Today’s plea reflects that employees with management authority at cryptocurrency exchanges, no less than the founders of such exchanges, cannot willfully disregard their obligations under the Bank Secrecy Act.”

Dwyer accepting committed the above-mentioned crimes follows guilty pleas to the same charges by the crypto exchange’s three co-founders (Benjamin Delo, Arthur Hayes and Samuel Reed).

Prosecutors stated that from 2015 to 2020, Dwyer and BitMEX co-founders intentionally violated the federal Bank Secrecy Act by failing to adopt “know your customer” and anti-money laundering programs, thus turning the exchange into a money laundering platform.

In February, Delo, Reed, and Hayes admitted they had failed to “willfully failing to establish, implement, and maintain an Anti-Money Laundering (AML) program.”

In May, the US Commodity Futures Trading Commission (CFTC) fined the three BitMEX co-founders $10 million each for breaching anti-money laundering (AML) requirements and each was sentenced to probation.

Prosecutors alleged that the three failed to implement KYC processes for their U.S. customers, thus making their exchange an effective money laundering platform and processing up to $209 million in questionable transactions.

In August last year, BitMEX agreed to pay $100 million to settle civil allegations that it allowed illegal trades for years and violated rules requiring anti-money-laundering programs.

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BitMEX’s Arthur Hayes surrenders in Hawaii, released on $10M bond

Former BitMEX CEO Arthur Hayes surrendered to U.S. authorities in Hawaii on Tuesday, six months after federal prosecutors first levied charges against him and three fellow BitMEX executives.

In a statement, Hayes’ lawyers described the Singapore resident as “a self-made entrepreneur who has been wrongly accused of crimes that he did not commit,” adding:

“Mr. Hayes voluntarily appeared in court and looks forward to fighting these unwarranted charges.”

Hayes was released after posting a $10 million bail bond pending future proceedings in New York.

Hayes’ lawyers proposed his surrender in Hawaii last month. Discussions centered around Hayes’ potential release subject to the $10 million bail bond, his retention of a passport for travel between Singapore and the United States, and a waiver of extradition mutually agreed upon by both parties.

Hayes’ representation began talks with the U.S. government after his indictment was unsealed in October 2020.

The government accuses Hayes, BitMEX co-owners Ben Delo and Greg Dwyer, and former BitMEX CTO Samuel Reed of violating the Bank Secrecy Act by failing to maintain adequate anti-money laundering safeguards and failing to prevent U.S. residents from accessing the exchange despite the company not being registered with the Commodity Futures Trading Commission.

Reed was arrested in October, while Delo voluntarily surrendered to authorities in New York last month, with both pleading not guilty and being released on bond. Dwyer remains at large, however his lawyers state they have notified the U.S. government as to Dwyer’s whereabouts and intention to fight the charges against him.