Offering valuable assets, like cryptocurrencies, should only be done with proper permission for the country’s financial regulators. Otherwise, the customer may be risking losing funds to unreliable platforms and service providers. After all, hacking attacks, scams, and frauds are increasingly common since the boom of cryptocurrencies.
Unfortunately, a 25-year old man from Westwood, a location in Los Angeles (California, United States) recently pleaded guilty to several charges, accused of exchanging approximately $25 million in cash and digital assets without the necessary permissions from a financial watchdog in the nation, nor compliance with the anti-money laundering scheme.
The “Coinman” Has Agreed to Plead Guilty
The man’s name is Kunal Kalra, and he goes by the pseudonyms of “Kumar,” “shecklemayne” and “coinman.” He was indicted over the weekend, for performing crypto trading operations and transactions for drug dealers and other people with legally questionable backgrounds, through his bitcoin ATM kiosk.
The news was announced by the US Justice Department. The institution has informed that the man has already agreed to plead guilty to the charges, and he is scheduled to appear in court for the first time in September.
“Kalra established bank accounts in the names of others, including fake businesses, which allowed him, for a time, to conceal his illicit business activities, court papers state. Kalra also admitted to operating a kiosk – essentially an ATM – where his customers could exchange Bitcoin for cash and vice versa. Kalra profited from every transaction conducted on the ATM. Customers who sought to do an exchange using this ATM were not required to provide their identities and Kalra did not install a camera or implement any features requiring customers to identify themselves, the plea agreement states,” according to the released document.
According to the press release by the US Justice Department, the accused managed a crypto exchange business from May 2015 to October 2017, and it functioned without a license. He also conceded that he exchanged BTC for cash with criminals who got the digital assets by selling drugs on the dark web.
Failing to Implement the Anti-Money Laundering Program
According to the department of justice, Kalra failed to implement the anti-money laundering program whilst serving as a facilitator of the mentioned transactions and earning a commission for his services. He knew that the funds’ origin was tied to drug dealing activities.
Law enforcement agencies seized nearly a million dollars from Kalra (the exact number being $889,000) as part of the investigation. These organizations also took 54.3 BTC and other crypto assets from the criminal, which added up to nearly $500,000.
More details on the case, per the release: “In June 2017, Kalra sold nearly two pounds of methamphetamine to an undercover law enforcement official in exchange for $6,000. Kalra and the undercover agent later met at a coffee shop in Signal Hill to exchange $50,000 in Bitcoin for cash, which the undercover agent represented to Kalra was the proceeds of the sales of the methamphetamine that Kalra had sold to the agent, the plea agreement states.”
According to the announcement, Kalra could face a maximum penalty of a lifetime in prison.
By Andres Chavez