Bitcoin dealer sentenced to two years in prison for failure to comply with AML and KYC

A Bitcoin dealer based in California has been sentenced to two years in prison for failing to comply with Anti-Money Laundering and Know Your Customer regulations

A Bitcoin dealer in California has been sentenced to two years in prison for illicitly selling Bitcoin without conducting Anti-Money Laundering (AML) and Know Your Customer (KYC) checks on his customers.

According to a press release, Jacob Burrell Campos of Rosarito, Mexico, has been sentenced by US district judge Marilyn L. Huff to serve a two-year prison sentence alongside forfeiting $823,357 of profit he had made from selling Bitcoin.

He has been sentenced and ordered to forfeit his profits as a result of operating an illicit and unlicensed money transmitting business through is a peer-to-peer (P2P) marketplace where users can trade Bitcoin with each other without the need for an exchange or middleman.

He has reportedly been connected with the sale of “hundreds of thousands of dollars” in Bitcoin to more than 1,000 customers.

Burrell, who is a US citizen, has been held in custody without bail since August 2018. He pleaded guilty on October 29, 2018, admitting that he operated his business without registering with the Financial Crimes Enforcement Network (FinCEN) of the US Department of the Treasury.

Reportedly, he is also guilty of not complying with AML and KYC safeguards to help mitigate against illegal activities such as money laundering.

According to the plea agreement, Burrell advertised his business on and communicated with his customers through text and email – often using encrypted applications.

He negotiated 5% above the prevailing exchange rate and accepted cash in person.

Burrell has reportedly admitted to not enforcing AML and KYC nor did he perform due diligence on how his customers obtained their funds.

He has also reportedly admitted to purchasing large amounts of Bitcoin through a US-based regulated exchange – but his account was closed following a series of suspicious transactions.

He then resorted to an exchange in Hong Kong where he bought a total of $3.29 million worth of Bitcoin spread over hundreds of transactions between March 2015 and April 2017.

Burrell has also reportedly admitted to exchanging his crypto for cash – which he kept in Mexico – with Joseph Castillo, a San Diego-based precious metals dealer.

Allegedly, between late 2016 and early 2018, Burrell and others imported a total of more than $1 million into the US in amounts slightly below the $10,000 reporting requirement.

It has been ruled that unlicensed money transmitters pose a significant threat to the integrity of the US financial system by circumventing the AML regulatory scheme and allowing criminals to launder their money.

Interested in reading more crypto crime-related news? Discover more about a Canadian drug dealer who was ordered to forfeit $1.9 million in Bitcoin.


Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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