A 22-year-old man in the US has been sentenced to two years in prison for selling hundreds of thousands of dollars in Bitcoin BTC through an unlicensed money transmitting business.
Jacob Burrell Campos, who had been in custody without bail since he was arrested in August last year, was also forced to forfeit $823,357 in illicit profits.
He plead guilty on October 29, admitting he had operated a Bitcoin exchange without previously registering the business with the Financial Crimes Enforcement Network (FinCen) of the US Department of Treasury. He also admitted he had not implemented the necessary anti-money laundering procedures (AML).
“Today’s 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,” said David Shaw, special agent in charge for Homeland Security investigations in San Diego.
Burrell advertised his business on LocalBitcoins.com and communicated with customers using text messages and emails, typically resorting to encrypted applications.
He negotiated a commission of 5 percent above the prevailing exchange rate, and accepted cash payments in person, through ATMs, and MoneyGram.
Burrell also admitted he failed to have a “Know Your Customer” program and said he did not perform any due diligence on the source of his client’s funds.
At first, Burrell bought his initial supply of Bitcoin using a US-based regulated exchange, but his account was eventually closed due to the suspiciously large trading volume.
Following this, Burrell turned to a cryptocurrency exchange in Hong Kong, where he bought $3.29 million in Bitcoin, across hundreds of transactions, from March 2015 until April 2017.
He then exchanged his US cash – stored in Mexico – with Joseph Castillo, a San Diego-based precious metal dealer.
Burrell also admitted that, between late 2016 and early 2018, he and others imported into the US, on an almost daily basis, a total of over $1 million in amounts slightly under the set $10,000 reporting requirement.
Published April 9, 2019 — 10:04 UTC