Bitcoin Fanatic To Be Convicted For Operating A”Unlicensed Money Transmitting Business“
Per a “News Release Summary” from the United States Department of Justice (DOJ), during a federal-level court hearing, a U.S. citizen has pled guilty to a crime pertaining to the cryptocurrency realm, or Bitcoin (BTC) to be specific.
The citizen, Jacob Burrell Campos of San Diego, reportedly confessed to operating an unlicensed money transmitting business, which was focused on the purchase and sale of crypto assets, Bitcoin (BTC) included. Campos reportedly sold “hundreds of thousands of dollars” worth of BTC to over 1,000 clients across the U.S. in 16 months, with the DOJ finding that he ran his business (of sorts) from January 2015 to April in 2016.
Although selling BTC isn’t inherently illegal (far from in fact), the scale of Campos’ business likely threw regulators for a loop, resulting in cryptocurrency fanatic’s unfortunate charging in federal courts.
According to the release, when Campos, who is only 21-years-old, pled guilty, he openly admitted to operating a Bitcoin (cryptocurrency) exchange with the U.S. Department of Treasury/Financial Crimes Enforcement Network (FinCEN)’s approval, which is a big ‘no-no’ in America’s crypto scene. Moreover, unlike established platforms like Coinbase and Gemini, Campos reportedly failed to integrate proper anti-money laundering procedures, implying that he may have knowingly supplied BTC to felons.
The now-criminal also noted that he failed to perform due diligence on the source of his client’s funds, again opening the floor for consumers to use Campos’ service for illicit acts.
While the aforementioned makes sense, you may be left wondering — what did his exchange entail?
Well, as per the release, Campos, also referred to as “Burrell,” reportedly advertised his BTC offerings through Localbitcoins.com, a prominent peer-to-peer BTC trading site, corresponding with his clients through email, text, and through encryption-enabled messaging platforms, presumably like Telegram.
Via the aforementioned communication mediums, Campos reportedly negotiated for a 5% commision on all BTC sales, accepting fiat in-person, through ATMs, and through MoneyGram, netting himself a hefty profit as the trades racked up.
Campos went on to admit that he originally purchased his BTC stock through a “U.S.-based, regulated exchange,” but noted that his account was flagged and subsequently shut down after he logged a number of suspicious transactions. Following the account’s closure, he moved on to a Hong Kong-based exchange, reportedly purchasing upwards of $3.3 million in BTC over 25 months in “hundreds of separate transactions.”
Along with operating an illegal “money transmitting business,” Campos also revealed that he exchanged his U.S. dollars, which were situated in Mexico, with a San Diego-based precious metals dealer named Joseph Castillo. Over the course of a 1.5 year time period, Burrel and an unnamed group of accomplices reportedly imported over $1 million in USD on an “almost daily basis,” smuggling large stacks of greenbacks through playing in a regulatory grey zone.
Due to his aforementioned actions, Campos agreed to forfeit $823,357 USD to the U.S. government and is currently facing a sentencing of a maximum of five years in the slammer.
Commenting on the case, attorney Adam Braverman wrote:
Unlicensed money transmitting businesses, especially those operating at or near the border, pose a serious threat to the integrity of the US banking system, and provide an ‘open door’ for criminals to utilize such businesses to launder the proceeds of their illicit activities.
Title Image Courtesy of Sharon McCutcheon on Unsplash
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