Facing Jail Time, Bitcoin Trader Admits Running Unlicensed Exchange

Facing Jail Time, Bitcoin Trader Admits Running Unlicensed Exchange

Californian bitcoin trader Jacob Burrell-Campos pleaded guilty this week to charges associated with operating an illicit bitcoin exchange. Burrell-Campos was accused of swapping millions of dollars by buying and selling bitcoins through an unlicensed crypto trading operation and could face a maximum of five years of jail time.  

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Copping a Plea, Forfeiting $800,000

Arrested in August 2018, Burrell-Campos faced over a dozen money laundering charges in the United States.

Per his new plea agreement, the 21-year-old Burrell-Campos admitted to operating a bitcoin exchange without registering it with the Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury Department.

The bitcoin trader also admitted to illegally importing millions of U.S. dollars into the United States and not incorporating Know Your Customer (KYC) and anti-money laundering (AML) policies into his operation.

As he heads toward sentencing, Burrell-Campos could face maximum statutory punishments of five years in prison and a fine of $250,000 USD. The bitcoin trader has already agreed to cede $823,357 in funds associated with his illegal operation to the U.S. government.

The plea agreement highlighted how Burrell used peer-to-peer exchange platform LocalBitcoins to facilitate his bitcoin exchange services. Reportedly, the trader charged a five percent markup on his deals.

Run an Unregistered Exchange at Your Own Peril, Says DOJ

Adam Braverman, a U.S. Attorney with the Southern District of California, noted in the plea announcement that Burrell-Campos’s case should serve as a reminder to others who would consider running similar enterprises:

“Unlicensed money transmitting businesses, especially those operating at or near the border, pose a serious threat to the integrity of the US banking system, and provide an ‘open door’ for criminals to utilize such businesses to launder the proceeds of their illicit activities. The Department of Justice will continue to investigate and prosecute all individuals and businesses that seek to evade the licensing and anti-money laundering requirements under federal law.”

Indeed, Braverman’s office was able to track millions of dollars worth of Burrell-Campos’s bitcoin purchases and sales via hundreds of transactions between the springtimes of 2015 and 2017. The defendant’s activities ranged from large-scale bitcoin buy-ups in Hong Kong to “cleaning” his proceeds through exchanges with Southern Californian precious metals dealer Joseph Castillo. 

Like Burrell-Campos, Castillo is awaiting sentencing after having pleaded guilty in separate proceedings to lying on his federal tax returns.

DOJ: Digital crime leads to real time.

It’s clear that the Department of Justice is paying increased attention to crimes linked to the crypteconomy. Back in May of this year, the DOJ announced the launch of an investigation into price manipulation practices in the digital assets ecosystem. 

Cases like Burrell-Campos’s and investigations like the aforementioned are sure to increase as the DOJ looks to crackdown on a space it views as ripe with criminality.

What is your take on the use of cryptocurrencies for illegal purposes? What should be done on this front? Share your views in the comments section.


Images via Pixabay

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