Bitcoin Trader Ordered to Forfeit $800K Gained via Unlicensed Exchange

A 22-year-old bitcoin dealer from the U.S. has been ordered to hand over $823,357 gained illegally via an unlicensed money transmission business.

Apr 9, 2019 at 2:00 p.m. UTC
Updated Sep 13, 2021 at 9:03 a.m. UTC

A 22-year-old bitcoin seller from the U.S. has been ordered to hand over $823,357 gained illegally via an unlicensed money transmission business.

The Attorney’s Office of the Southern District of California announced the news on Monday, saying that the dealer, Jacob Burrell Campos, has also been sentenced to two years in jail. Burrell was taken to custody without bail last August, and later in October pleaded guilty that he had operated a bitcoin exchange without registering the business with the Financial Crimes Enforcement Network (FinCEN).

The dealer has now also been asked to pay a maximum fine of $250,000, according to Monday’s announcement.

Burrell sold hundreds of thousands of dollars in bitcoin to over 1,000 customers, the Attorney’s Office said, adding that he advertised his business on LocalBitcoins.com, negotiated a commission of 5 percent above the prevailing exchange rate and accepted cash in person via ATMs and MoneyGram.

Burrell has now admitted that he did not have any know-your-customer (KYC) or anti-money laundering (AML) procedures in place to perform due diligence on the source of his customers’ money.

He has also admitted that he initially bought bitcoin through a regulated crypto exchange in the U.S. but later shifted to a Hong Kong-based exchange after his U.S. account was closed over suspicious transactions. He bought bitcoins worth $3.29 million via the Hong Kong exchange from March 2015 to April 2017.

Finally, Burrell has admitted that he exchanged his U.S. dollars with a San Diego-based precious metals dealer Joseph Castillo, and that between late 2016 and early 2018, he and others imported a total of over $1 million in U.S. currency almost on a daily basis.

Homeland Security Investigations’ special agent in charge, David Shaw, 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 said: “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.”

Bitcoin, gavel and handcuffs image via Shutterstock 

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
CoinDesk - Unknown
Sequoia's Guide to Surviving the 2022 Bear Market

Venture capitalists have gotten increasingly frantic over the last few months.

Venture capitalists have gotten increasingly frantic over the last few months.

CoinDesk - Unknown
2
CoinDesk - Unknown
NFT Art Museums Are a Good Idea

The metaverse turns galleries global, and helps fund the arts. This article is part of “Metaverse Week."

The metaverse turns galleries global, and helps fund the arts. This article is part of “Metaverse Week."

CoinDesk - Unknown
3
CoinDesk - Unknown
How the US Can Establish Itself as a Crypto Leader

Regulators have an opportunity to map out thoughtful, strategic policy on stablecoins and beyond.

Regulators have an opportunity to map out thoughtful, strategic policy on stablecoins and beyond.

CoinDesk - Unknown
4
CoinDesk - Unknown
No, the UK Is Not Going to Make USDC and USDT Legal Tender

For “legalize” read “regulate.”

For “legalize” read “regulate.”

CoinDesk - Unknown