A 22-year-old bitcoin trader from the U.S. has been ordered to forfeit $823,357 gained illegitimately through an unregistered money transmission services.
The Attorney’s Office of the Southern District of California revealed the news on April 8, stating that the dealer, Jacob Burrell Campos, will also face two-year jail time. Last August, Burrell was taken to custody without bail. In October, he pleaded guilty on operating a bitcoin exchange without getting a license from Financial Crimes Enforcement Network (FinCEN).
According to the announcement, Burrel also needs to pay a maximum fine of $250,000.
The Attorney’s office said that the dealer sold hundreds of thousands of dollars worth of bitcoin to more than 1,000 clients. He also advertised his dealings on LocalBitcoins.com, accepted cash in person through ATMs and MoneyGram, and charged a commission of five percent above the predominant exchange rate.
Burrell has now admitted that his business was not compliant with any anti-money laundering (AML) or know-your-customer (KYC) procedures to verify the source of his clients’ money.
He has also admitted that at first, he bought bitcoins through a U.S.-regulated crypto exchange, but later transferred to a cryptocurrency exchange based in Hong Kong after his account was shut down because of suspicious transactions. He purchased bitcoins worth $3.39 million through the Hong Kong exchange from March 2015 to April 2017.
Ultimately, Burrell has admitted that he converted his U.S. dollars with a precious metals dealer based in San Diego, in the name of Joseph Castillo, and that between late 2016 and early 2018, he and others made transactions of more than 1 million USD almost every day.
David Shaw, Homeland Security Investigations’ special agent in charge, said:
“[The] sentencing of Burrell is a reminder to those illegal and unlicensed money transmitters that the laws and rules apply to crypto currency dealings just as they do to other types of financial transactions.”
U.S. Attorney Robert Brewer stated: “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.”