Finance

Top BitMEX employee guilty of violating US anti-money-laundering rules


A top employee at BitMEX has pleaded guilty in New York to failing to put in place an anti-money-laundering programme at the cryptocurrency derivatives exchange, joining three co-founders who previously admitted to violations of US law.

Gregory Dwyer entered a guilty plea on 8 August in New York federal court, admitting to one count of violating the Bank Secrecy Act.

Prosecutors said Dwyer, one of the first employees of BitMEX and its onetime head of business development, was involved in BitMEX’s flouting of US anti-money-laundering rules.

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The Seychelles-incorporated exchange in 2015 announced a withdrawal from the US market but made only minimal, ineffective efforts to stop US-based customers from signing up to BitMEX, according to prosecutors. Thousands of US-based clients were able to use the service even though they were meant to be blocked, and the controls put in place were “facade”, prosecutors said.

Prosecutors said BitMEX in effect operated as a money-laundering platform because it had no anti-money-laundering and know-your-customer programs.

“Today’s plea reflects that employees with management authority at cryptocurrency exchanges, no less than the founders of such exchanges, cannot wilfully disregard their obligations under the Bank Secrecy Act,” Manhattan US Attorney Damian Williams said.

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Dwyer, a 39-year-old citizen of Australia and Bermuda, was among four top BitMEX figures charged in New York. He had pleaded not guilty. Three co-founders, including former BitMEX chief executive Arthur Hayes, pleaded guilty earlier this year. Hayes was sentenced to house arrest, and co-founder Benjamin Delo was sentenced to 30 months probation.

When prosecutors first filed charges against the four in 2020, BitMEX had grown from a startup to become one of the largest crypto exchanges in the world. Hayes, who founded BitMEX at age 28, personally earned more than $100m for his work.

As part of a plea deal with prosecutors, Dwyer agreed to pay a $150,000 fine. BitMEX itself entered a $100m settlement with US regulators in 2021.

This article was first published by The Wall Street Journal, a fellow Dow Jones Group title

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