Eric Powers, a resident of Kern County, California, will pay a fine of $35,000 and also lose any rights to work as a money services agent, according to an April 18 press release by the U.S Financial Crimes Network (FinCEN).
As per the release, Mr Powers's crime was willfully violating State laws for money transmitters while working as a peer-to-peer exchanger for convertible cryptocurrencies.
Among other things expected by law, FinCEN stated that:
Mr Power failed to register as a money services business and also did not set up the right processes to conduct AML check on his clients.
Even after knowing that he was required to fill a currency transfer report (CTR) for transactions exceeding $10,000, Powers willfully conducted over 200 transactions involving the transfer of more than$10,000 worth of currency. FinCEN adds that Powers conducted up to $5 million worth of Bitcoin transaction with an individual whom he hooked up with via a Bitcoin forum.
By failing to abide by the laws mentioned above, FinCEN noted that Powers was putting the financial system and national security at risk and at the same time undercutting responsible innovation in the financial services space.
However, because he cooperated with the regulators since infringing the law, FinCEN only spells out a $35,000 fine for his offence. Additionally, he would be barred from “providing money transmission services or engaging in any other activity that would make him a “money services business.”
While FinCEN reports that this is their first enforcement action against a peer-to-peer virtual currency exchanger, it is certainly not the first case of such in California.
Earlier this month, Stmarket.co reported that 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.
The ruling against Campos was announced by the U.S. Attorney’s Office of the Southern District of California.