According to a press release by the U.S. Attorney’s Office of the Southern District of California, Jacob Burrell Campos, a Mexican and U.S citizen was handed a two-year jail term and ordered to forfeit $823,357 worth of profits gotten from running a one-person Bitcoin exchange business.
In October, we reported that Burrell could face up to five years in prison for the offense.
Nature of the crime
Jacob Burrell's admitted to selling Bitcoin to over 1000 U.S residents he met on the peer-to-peer exchange, LocalBitcoins, without conducting due checks on the source of the funds he received from the buyers.
He would do business with his clients by collecting cash in hand or via MoneyGram, ATM transfers and other similar methods even though he had no anti-money laundering processes in place for the self-run Bitcoin exchange.
Burrell also reportedly admitted that he adopted the peer-to-peer approach to selling Bitcoin's after an unnamed U.S cryptocurrency exchange banned him from their platform for executing suspicious transactions.
It was after the ban that he registered on a South Korean crypto exchange and traded as much as $3.29 million worth of Bitcoins in just over two years (March 2015-April 2017)
Burrell also admitted to the court that he charged a 5% fee based on the current cryptocurrency exchange rates before he was subsequently tracked down and arrested by authorities in August 2018.
Prosecutors noted that Jacob Burrell operated as a Money Transmitter, facilitating the transfer of up to $1 million, without registering with the Financial Crimes Enforcement Network (FinCEN) to offer such services to U.S residents.
Such movement of unregulated cash according to prosecutors is a “serious threat to the integrity of the U.S. financial system” since it creates a hole in the anti-money laundering regulatory scheme and allows criminals to launder their cash proceeds without scrutiny.
A 2-year jail term (5-year Max)
Forfeiting $823,357 worth of profits
A $250,000 fine.
In a similar development, we reported that a Canadian court asked Matthew Phan, an alleged online drug dealer to forfeit 281.41BTC (appr. $1.4 million) ill profits from his dark web activities.
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