Arizona Bitcoin Trader Charged With Money Laundering

A bitcoin trader and advocate in Arizona has been charged with operating an unlawful money transmission.

Jun 29, 2017 at 3:35 p.m. UTC
Updated Sep 11, 2021 at 1:30 p.m. UTC

A bitcoin trader and advocate in Arizona has been charged with operating an unlawful money transmission business.

Thomas Costanzo, who runs a bitcoin services website that offers sales for bitcoin mining equipment and ATMs, was arrested in late April and initially charged with the unlawful possession of a firearm, which resulted from a previous conviction.

A new superseding indictment, unsealed this week, reveals that the government is pressing charges against Costanzo related to his digital currency activities. Costanzo was accused of exchanged $166,000 with undercover agents between May 2015 and April 2017, funds that were "represented by a law enforcement officer to be proceeds of specified unlawful activity", according to the indictment.

Court documents show that another individual, Peter Steinmetz, is also being charged. Costanzo and Steinmetz were each charged for running an illegal money transmission business. Costanzo was additionally charged with money laundering and felony possession of a firearm.

In April, local and federal law enforcement officials raided Costanzo's residence and later had him held following an initial hearing. Police records published at the time showed that officials included bitcoin and digital currency-related items in their warrant, suggesting at the time that they might press for charges beyond the gun-related one.

The court case is the latest in the US to involve a bitcoin trader or seller who is charged with unlawful money transmission. In some of those instances, undercover investigators would purchase bitcoins from those targeted in the sting operations.

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