In the crypto industry, one that still has not surpassed the obvious hurdle that represents coming up with a proper legal framework is very important to do things right, without taking advantage of naive users that put their faith and resources in a specific platform without thinking they could be tricked by a criminal.
A particular case made the headlines this week in the United States of America, as a 22-year-old trader was ordered by the Attorney’s Office of the Southern District of California to give back more than $800,000 he had made illegally via a money transmission business that had no license.
A Two-Year Prison Sentence
The development was reported at the start of the week by the Attorney’s Office of the Southern District of California, which also informed that the dealer in question, whose name is Jacob Burrell Campos, received a two-year prison sentence for his shady acts.
Burrell was actually taken to custody last year, in August, without bail. He had pleaded guilty in October of managing a Bitcoin exchange without licensing or registering the business with the right organization, in this case, the Financial Crimes Enforcement Network (FinCEN). In addition to giving back the “earnings” and spending two years in jail, Burrell was also asked to pay a maximum fine of $250,000.
Among the acts performed by Burrell were selling hundreds of thousands of dollars worth of Bitcoin to more than 1,000 clients of the unlicensed exchange, according to information provided by the Attorney’s Office. The man advertised his site on LocalBitcoins.com, and also earned a commission that was 5% over the prevailing exchange rate whilst also taking cash thanks to ATMs and MoneyGram.
The infractor admitted to the American justice that his site did not have any KYC (Know Your Customer) or AML (Anti Money Laundering) performances to get to know the customers and the origin of their funds.
Dirty, Risky Business
According to Burrell, he had to shift to a Hong Kong-based crypto exchange after his American account was closed because of the suspicious nature of the transactions he performed. He said that he, at least initially, acquired BTC through a properly regulated platform, but later confessed that he bought $3.29 million worth of Bitcoin in the Hong Kong exchange from 2015 to 2017.
Burrell also told that he exchanged his USD with Joseph Castillo, a precious metals dealer in the city of San Diego and that he and other associates imported more than $1 million of US currency daily.
David Shaw, the Homeland Security Investigations’ special agent in charge of the case, stated that “[the] sentencing of Burrell is a reminder to those illegal and unlicensed money transmitters that the laws and rules apply to cryptocurrency dealings just as they do to other types of financial transactions.”
On the other hand, U.S. Attorney Robert Brewer explained that “the federal government will continue to investigate and prosecute all white collar criminals who refuse to comply with the anti-money laundering laws of the United States, and who assist others in avoiding scrutiny of their ill-gotten gains.”
By Andres Chavez