Lawyers for BitMEX’s first employee Greg Dwyer say he’s in talks with the US and preparing to clear his name in court, reports the Sydney Morning Herald (SMH).
US authorities charged Dwyer alongside BitMEX co-founders Arthur Hayes, Benjamin Delo, and Samuel Reed last October for allegedly breaching the Bank Secrecy Act, which is designed to prevent money laundering.
The Department of Justice (DoJ) claims BitMEX insiders intentionally flouted strict anti-money laundering regulations by purportedly basing the crypto exchange off-shore in Bermuda.
This meant BitMEX operated “in the shadows of financial markets,” said acting Manhattan US attorney Audrey Strauss. The indictment describes BitMEX’s “bottom line goal” as obtaining revenue from the US market “without regard to US regulation.”
On the allegations levied against Dwyer, lawyer Jenna Dabbs recently told SMH reporters: “We have been in touch with the government on this matter and […] Dwyer has every intention to defend himself in court against these meritless charges.”
Previously, Dwyer’s lawyers reportedly maintained Dwyer was not responsible for BitMEX’s anti-money laundering systems, saying their client “always worked collaboratively with his colleagues, and in good faith, to comply with all applicable regulations and requirements.”
Dwyer — who joined the company in 2015 — holds the title BitMEX’s “Head of Business Development.”
The 37-year-old is still officially at large (with Bermuda his last reported residence), but authorities have already released BitMEX co-founders Reed and Delo on bail.
BitMEX made margin trading big in crypto
BitMEX was notably the first crypto exchange to offer “perpetual futures contracts” for cryptocurrencies like Bitcoin, which work similarly to Contracts for Difference (CFDs).
While CFDs and perpetuals differ in some ways (CFDs are issued by a broker and perpetuals trade peer-to-peer), they both allow leveraged exposure to price movements of an underlying asset — in BitMEX’s case up to 100 times.
Traditional CFDs are illegal under US securities law.
BitMEX’s former CTO Reed was arrested in Massachusetts around the time of the DoJ’s indictment, while Delo turned himself into New York authorities earlier this month. They respectively posted $5 million bond and $20 million bail.
However, chief exec Arthur Hayes — a resident of Singapore — is still negotiating the terms of his surrender, which could potentially take place in Hawaii.
All four men have denied their charges but face up to five years prison per count if convicted (there’s two each).