Top Exchange Employee Gregory Dwyer Plead Guilty to AML Violations

BitMEX Former top Employee Gregory Dwyer Plead Guilty to AML Violations.

Australian cryptocurrency mogul and former top executive at BitMEX Gregory Dwyer on August 8th pleaded guilty to violating American banking laws. The U.S Attorney for the Southern District of New York made this disclosure in a press release. 

Specifically, Gregory Dwyer admitted that BitMEX, one of the world’s largest cryptocurrency exchanges, failed to implement nor abide by Anti-Money Laundering (AML) standards, thereby violating the Bank Secrecy Act (BSA). 

Establishing, implementing, and maintaining an active AML program is a mandatory requirement for companies wishing to operate in the U.S. This also includes implementing Know Your Customer (KYC) policies to identify transacting customers. However, the embattled mogul admitted that he and the three founders of BitMEX willfully neglected to comply with these requirements. 

Rather than comply, he admitted that the company operated in the US under the impression that it had implemented these AML and KYC requirements. This violation, the prosecutors alleged, carried on between 2015 to 2020, and the exchange operated as a money laundering platform.  

Per the plea agreement, the Aussie is facing five years imprisonment and a $150,000 fine. 

In a statement, U.S Attorney Damian Williams said: “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.”  

The 39-year-old Dwyer, who was one of the first employees at BitMEX, previously served as its Head of Business Development. The company’s regulatory woes started in August last year after it paid $100 million to settle civil allegations that it allowed illegal trades for years and violated AML standards. 

Benjamin Delo, Samuel Reed, and Arthur Hayes, the trio who found BitMEX earlier in February, pleaded to similar charges of failing to establish, implement and maintain an AML program. 

This was followed by probation and a $10 million fine issued against each of them in May by the U.S Commodity Futures Trading Commission for breaching these AML requirements.   

U.S regulators have, since the Terra-Implosion, which caused billions to be wiped off the market, increased their regulatory watch on cryptocurrency institutions in the U.S. As part of its regulatory clampdown, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC), earlier on August 9, banned virtual currency mixer Tornado Cash.

As per recent developments, broader crypto regulations are expected to be introduced in the coming months.