BitMEX Business Development Head Pleads Guilty To Bank Secrecy Act Violation

The former head of business development at BitMEX, a major crypto derivatives exchange, has pled guilty to willfully not following the U.S. anti-money laundering laws.

The United States Attorney for the Southern District of New York announced Monday that Gregory Dwyer pled guilty to violating the Bank Secrecy Act for "failing to establish, implement, and maintain an anti-money laundering program at BitMEX, and aiding and abetting the same" in the presence of U.S. District Judge John G. Koeltl.

The violation of the Bank Secrecy Act carries up to five years of imprisonment. However, according to the terms of his plea agreement, Dwyer will separately pay a $150,000 criminal fine "representing pecuniary gain derived from the offense."

"Dwyer aided and abetted BitMEX's failure to institute AML or KYC programs despite closely following U.S. regulatory developments that made clear the legal obligation to do so if BitMEX operated in the United States, which it did," said the announcement.

Dwyer, 39, a citizen of Australia and Bermuda, was one of the first employees at the Bitcoin Mercantile Exchange or BitMEX. He worked as a senior executive from 2015 and also ran the exchange's Manhattan office while also operating as its head of business development. However, in 2019, Dwyer moved to the Bermuda office of the exchange.

"With this plea, this Office has now obtained criminal convictions against all three founders, as well as a high-ranking employee at BitMEX, for willful violations of anti-money laundering laws. 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," said Manhattan U.S. Attorney Damian Williams.

Bermudan newspaper The Royal Gazette reported that Dwyer agreed to extradition to the United States from Bermuda in September 2021.

The co-founders of BitMEX - Arthur Hayes, Benjamin Delo and Samuel Reed - were also indicted by the U.S. Attorney who pointed out that BitMEX was a center of money laundering due to a lack of know-your-customer (KYC) requirements and lose anti-money laundering rules.

Delo and Hayes were sentenced to pay $10 million and the latter was also sentenced to six months of home detention and two years probation. Delo was sentenced to 30 months probation without home confinement.