Aussie bitcoin mogul in talks with US prosecutors after co-accused plead guilty
Australian bitcoin mogul Greg Dwyer is in talks with US prosecutors to try to resolve a criminal case brought against him and the cofounders of multibillion-dollar cryptocurrency platform BitMEX.
Dwyer, who was raised in Sydney’s north shore but now resides in Bermuda, is facing charges that could carry prison terms in excess of 12 months.
Greg Dwyer is locked in talks with US prosecutors after his co-accused, including Arthur Hayes (right), have pleaded guilty. Credit:Mark Stehle and Business Insider
As previously revealed by The Age and The Sydney Morning Herald, the St Ignatius Riverview and Sydney University graduate has been charged in the US, along with the three founders of BitMEX, with deliberately and wilfully breaching banking laws and dealing with customers in the US when their firm was not licensed to do so.
BitMEX, a cryptocurrency exchange valued at $US3 billion ($4.2 billion), has been described by US regulators as a “platform for money laundering”.
Dwyer’s legal team was expected to file pre-trial documentation this week but has asked the US District Court for the Southern District of New York (SDNY) to extend that deadline by a week as discussions continue.
“The parties continue to engage in discussions regarding a possible resolution to the matter,” a letter sent to the court by Dwyer’s lawyer said.
Dwyer and prosecutors have been in discussions since April following the guilty pleas by the three founders at BitMEX, who were charged with breaching anti-money laundering protection laws and the bank secrecy act.
BitMEX’s charismatic chief executive and co-founder Arthur Hayes was sentenced earlier this year to six months’ home detention and a two-year good behaviour bond after admitting to violating US banking laws. The two other founders – Ben Delo and Sam Reed – are expected to be sentenced in the coming months.
Delo and Hayes have agreed to pay $10 million as part of their guilty pleas.
Earlier this year, the SDNY court allowed for Dwyer’s case to be severed from his co-accused to allow him more time to prepare for his trial. That decision came after Dwyer spent over a month fighting an extradition order to the US from Bermuda.
Dwyer was the first employee at what is now one of the world’s largest bitcoin and cryptocurrency-related exchanges. According to the US criminal indictment, Dwyer worked as a senior executive within the group from 2015, running its Manhattan office and operating as head of business development. In 2019, he moved to work at BitMEX’s offices in Bermuda.
By the time Dwyer moved to Bermuda, BitMEX was a big deal in the cryptocurrency scene. Its point of difference to other exchanges was to offer its members ways to bet on cryptocurrency prices without owning any cryptocurrencies themselves. This involved selling highly risky derivatives, which are illegal to sell to Americans.
On announcing Hayes’ and Delo’s guilty pleas, US Attorney Damian Williams said companies engaged in cryptocurrencies have become critical gatekeepers in efforts to drive out crime and corruption.
“Arthur Hayes and Benjamin Delo built a company designed to flout those obligations; they willfully failed to implement and maintain even basic anti-money laundering policies,” Williams said.
“They allowed BitMEX to operate as a platform in the shadows of the financial markets.”
The public relations firm representing Dwyer’s lawyers declined to comment.
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