Published: 2018-10-30 18:21:00
A Bitcoin trader in California has been accused of operating an illegal Bitcoin exchange. The US Attorney’s Office for the Southern District of California described the charges in a press release on Monday with Jacob Burrell Campos as the one standing trial. On Tuesday, Campos opted to plead guilty to the charges, which included the operation of an unlicensed money transmission business.
The statement says that Campos accepted a plea deal. In the deal, he “admitted to operating a Bitcoin exchange without registering with the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury, and without implementing the required anti-money laundering safeguards.”
Campos had advertised the exchange through Localbitcoins.com, though his communication with the potential investors and buyers happened on a personal level via email and text messages. The news release states that he “negotiated a commission of 5% above the prevailing exchange rate, and accepted cash in person, through nationwide ATMs, and through MoneyGram.” Unfortunately, he admitted that he did not use any protocols that are required of digital exchange, specifically the Know-Your-Customer (KYC) or anti-money laundering processes.
Attorney Adam Braverman commented,
“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. The Department of Justice will continue to investigate and prosecute all individuals and businesses that seek to evade the licensing and anti-money laundering requirements under federal law.”
To make it possible for Campos to perform this kind of service to consumers, he purchased a personal supply of Bitcoin through a regulated exchange. However, considering the numerous transactions that came out of it as a result, his account was shut down in the United States. Not to be deterred, he turned to a Hong Kong crypto exchange, using hundreds of transactions to accrue $3.29 million in Bitcoin. This process took just over two years from March 2015 to April 2017. Hundreds and thousands of dollars’ worth of Bitcoin were sold until April 2016.
Sentencing for Campos is scheduled on February 11th, 2019, and the official release indicates that the maximum sentence he can receive for the charges is five years. There is also a possibility of a $250,000 fine. However, as part of the plea agreement, he will already be turning in $823,357.
The official press release on this case can be viewed at https://www.justice.gov/usao-sdca/pr/bitcoin-dealer-pleads-guilty-agrees-forfeit-ill-gotten-gains.
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