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Samuel Reed, Arthur Hayes, and Benjamin Delo have already pleaded guilty, and have each agreed to pay a $10 million fine as part of the terms of their plea agreement.
The United States Attorney for the Southern District of New York has announced that an executive of crypto derivatives exchange BitMEX has pleaded guilty to violating the Bank Secrecy Act for failing to implement AML and KYC programs. According to the report, Gregory Dwyer was the head of business development at BitMEX. While discharging his duties, he and his colleagues – Arthur Hayes, Benjamin Delo, and Samuel Reed “failed to establish, implement, and maintain an anti-money laundering program”.
According to the criminal indictment, the exchange could have been used by hackers to launder money and was used by citizens of countries sanctioned by the US, including Iran. It was also reported that the exchange was not registered with the Commodity Futures Trading Commission (CFTC), but solicited and accepted customers from the US. This continued after the exchange had incorporated in Seychelles to exempt itself from US laws. This was a result of their failure to put in place a stringent KYC and AML procedure to block US customers. In 2020, Dwyer and his colleagues resigned from BitMEX and its sister company, 100x Group.
In August 2021, BitMEX paid $100 million in settlement with the US authorities for breaking the CFTC and FinCEN rules.
“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 US Attorney Damian Williams.
Delo is known as the first Bitcoin billionaire and the youngest self-made billionaire in the UK. He reported himself to the police on March 15, 2021, and was released on a $20 million bail.
Hayes also turned himself in to authorities on April 6, 2021, and was granted a $10 million bail. Reed was arrested on October 6, 2020. He was given a $5 million bail.
Samuel Reed, Arthur Hayes, and Benjamin Delo have already pleaded guilty, and have each agreed to pay a $10 million fine as part of the terms of their plea agreement. Dwyer has also agreed to pay a fine of $150k as part of his plea deal.
“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, ” added the attorney.