Unlicensed Bitcoin exchange U.S Citizen – A U.S. citizen, Jacob Burrell Campos, 21-year old Bitcoin dealer, has been found guilty and is facing federal charges for operating an unlicensed Bitcoin exchange after selling over $55,000 USD of Bitcoin to undercover agents. This story is according to a Department of Justice (DoJ) press release published Oct. 29.
Jacob Burrell Campos has reportedly admitted to operating an unlicensed money transmitting business, due to his sales of hundreds of thousands of dollars in Bitcoin to over 1,000 customers throughout the United States from January 2015 to April 2016.
Jacob admitted that he had no ‘know your customer’ (KYC) program and said that he first purchased Bitcoins from a U.S based regulated exchange, but his account was closed due to the large number of suspicious transactions.
He then turned to a Hong Kong-based cryptocurrency exchange platform, through which he purchased a total of $3.29 million worth of Bitcoin between March 2015-April 2017 in hundreds of individual transactions.
Unlicensed Bitcoin exchange U.S Citizen – Jacob admitted that he operated a Bitcoin exchange without registering his business activities with the U.S. Financial Crimes Enforcement Network (FinCEN) of the U.S. Similarly, Department of Treasury, and without implementing the necessary anti-money laundering (AML) safeguards.
Jacob Burrell advertised his business on ‘Localbitcoins.com’ and communicated with his customers through email and text messages, often using encrypted applications. He negotiated a commission of 5% above the prevailing exchange rate, and accepted cash in person, through nationwide ATMs, and through MoneyGram.
The press release reported that Burrell admitted that he exchanged his U.S. fiat currency with Joseph Castillo, a San Diego-based precious metals dealer, which he stored in Mexico. It also said that during 2016 and early 2018, Burrell and others imported over $1 million in US currency on a daily basis. Furthermore, Castillo has reportedly pleaded guilty to making a false declaration on his federal tax returns, and is awaiting sentencing on December 13, 2018.
Burrell will be sentenced in Feb. 11 2019, facing a maximum sentence of five years behind bars and has agreed to pay back the fine over $800,000 to the U.S. in his plea agreement.
“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.”
-U.S. attorney Adam Braverman