BitMEX Executive Pleads Guilty to Violating US Anti-Money Laundering Program

A federal court in New York previously sentenced the firm’s co-founders to probation time and fines.

AccessTimeIconAug 8, 2022 at 10:44 p.m. UTC
Updated May 11, 2023 at 4:33 p.m. UTC

A high-ranking employee at off-shore, crypto derivatives exchange BitMEX has pleaded guilty for violating a U.S. federal anti-money laundering law, the United States Attorney for the Southern District of New York announced Monday.

Gregory Dwyer, who formerly served as BitMEX’s head of business development, pleaded guilty to violating the Bank Secrecy Act for "failing to establish, implement and maintain an anti-money laundering program” at BitMEX.

The U.S. Attorney previously secured judgments against the firm's three co-founders, Arthur Hayes, Benjamin Delo and Samuel Reed. Prosecutors have said that the lack of know-your-customer (KYC) requirements at BitMEX allowed the company to thrive as a hotbed for criminal activity, including money laundering and sanctions evasion.

“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,” U.S. Attorney Damian Williams said in a press release.

Two years ago, the Commodity Futures Trading Commission, Department of Justice and the Financial Crimes Enforcement Network (FinCEN) slapped BitMex with civil and criminal charges after the firm allowed U.S. residents to trade crypto derivatives on its platform without being registered in the states or having substandard KYC practices. Although the agencies later settled with BitMEX for $100 million last summer, the charges resulted in a change of leadership at the exchange.

According to the plea agreement’s terms, Dwyer agreed to pay a $150,000 fine. The maximum penalty for his crime is five years in prison.

UPDATE (Aug. 8, 2022, 22:50 UTC): Changes headline to add detail.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Elizabeth Napolitano

Elizabeth Napolitano was a news reporter at CoinDesk.