Top Employee of Crypto Exchange BitMEX Sentenced Over US Charge

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A top employee at cryptocurrency derivatives trading exchange BitMEX was sentenced to 12 months probation Wednesday in federal court in Manhattan after pleading guilty to violating US anti-money-laundering rules.

Gregory Dwyer, a 39-year-old native of Australia, was one of the first employees at the exchange and its onetime head of business development. US prosecutors alleged Mr. Dwyer and the exchanges founders failed to implement anti-money-laundering and know-your-customer programs, as required by US law.

He pleaded guilty to one count of violating the Bank Secrecy Act in August. Under the plea agreement, Mr. Dwyer also agreed to pay $150,000 in fines.

The governments heavy-handed approach with respect to the prosecution of Mr. Dwyer is regrettable, and Mr. Dwyer is relieved to have this matter behind him and looks forward to getting on with his life, both personally and professionally, a spokesperson for Mr. Dwyer said in an email Thursday.

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A spokesman for the Southern District of New York, which brought the charges, confirmed the sentencing. Mr. Dwyer himself could not be reached.

Mr. Dwyers lawyers, in a sentencing memorandum filed in October, asked the judge to limit the punishment to the criminal fine, according to court documents. They argued that Mr. Dwyer, who joined BitMEX as a full-time employee in 2015, never served in any compliance, legal or regulatory role at BitMEX or in his previous work as a derivatives trader at Deutsche Bank AG and as a financial services consultant .

Mr. Dwyers sentencing is the latest developments in the USs case against the Seychelles-incorporated, Hong Kong-based crypto derivatives exchange.

BitMEX in 2015 announced a withdrawal from the US market, but prosecutors said it made only minimal, ineffective efforts to stop US-based customers from signing up to BitMEX. 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 a facade, prosecutors said, adding that BitMEX in effect operated as a money-laundering platform because it lacked anti- money-laundering and know-your-customer programs.

BitMEX agreed last year to pay $100 million to resolve the regulatory lawsuit without admitting or denying the allegations. Three of the companys co-founders have been sentenced to various periods of probation or house arrest over the past year.

Write to Mengqi Sun at [email protected]

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