US Justice Department Executes First Criminal Crypto Charge


The US Justice Department has laid an iron hand on an undisclosed American citizen who has sent roughly $10 million worth of digital coins to a location sanctioned by the Office of Foreign Assets Control (OFAC).

The defendant has allegedly transferred cryptocurrencies to a country that is currently under US sanctions such as Russia, Cuba, Syria, and North Korea; among others.

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Prior to the case, the US DOJ charged two persons with conspiracy to launder bitcoin (Protocol).

US Justice Dep’t Takes Action

Judge Zia M. Faruqui has approved the criminal charges on defendant who allegedly committed illegal transfer of cryptocurrencies to a country against OFAC regulations.

OFAC has been clear from the start that as stated in October 2020’s updated OFAC regulations that transactions made with sanctioned countries, whether involving fiat money or cryptocurrencies, is both considered illegal and prohibited.

According to Ari Redbor, Treasury Department Senior Adviser from 2019 to 2020, this is the first case but definitely not the last. It proves a point that the US Justice is taking this seriously and combating against people who are attempting to use cryptocurrencies as a vehicle to evade sanctions.

The BitFinex BTC Laundering Case

Prior to this case, two individuals were also charged with conspiracy by the US DOJ due to bitcoin laundering which was allegedly hacked from BitFinex, a crypto platform based in Hong Kong.

The OFAC clamps down on nefarious crypto activities (Oxebridge Quality Resources).

The very transparent and immutable nature of bitcoin can definitely work against criminals. In that BitFinex case, the funds were traced to a particular crypto wallet using blockchain analytics – “wallet1CGA4s.”

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All other perpetrators were traced when AlphBay, a darkweb site, was shut down in 2017. The recent arrests and seizure of crypto funds show that cryptocurrency is not something you can toy with without getting caught. This definitely isn’t an asset to play around with for criminals.

US DOJ Employs Blockchain Analytics Tools

The US Justice department is now using blockchain analytics tools to track down transactions of perpetrators. Hereinafter, they subpoenaed an American cryptocurrency exchange, U.S. bank, and also an international crypto exchange to gather more evidence about the perpetrator.

The IP or Internet Protocol addresses that are used with transactions on the exchanges helped track the location of the perpetrator. Additionally, the law enforcers also found out that the accounts used on both exchanges were in fact foreign accounts that come from countries sanctioned by OFAC.

Crypto total market cap at $1.3 trillion on the daily chart | Source: TradingView.com

Virtual Currency Is Traceable

According to Judge Zia M. Faruqui, virtual currency can be tracked down. In his opinion, the transaction of virtual currencies constitutes a criminal act which also involves two crypto platforms in the effort to avoid legal impediments.

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Featured image from Crypto Economy, chart from TradingView.com


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