A 22-year-old individual has been arrested and sentenced to two years imprisonment for operating a cryptocurrency exchange platform without registration before the U.S. Treasury Department, reported ethical hacking training specialists from the International Institute of Cyber Security (IICS).
Jacob Burrell, a U.S. citizen living in Mexico, accepted that he did not take any action against money laundering for the operation of his exchange platform, in addition to not taking the time to check the information of customers on his cryptocurrency platform; the defendant is under root since August 2018.
Although Burrell has not been charged with committing crimes such as robbery or cyber fraud, the fact of operating a cryptocurrency exchange platform without any permission was sufficient to be sentenced to two years’ imprisonment. According to ethical hacking training specialists, Burrell announced his services on the localbitcoins.com platform, focused on the cryptocurrency community, and resorted to the use of encrypted messaging applications, such as Telegram, to deal with his customers.
The defendant would have sold bitcoins 5% above the established exchange rate and accepted cash payments, which lured a lot of people involved with money laundering activities.
During the trial, Burrell mentioned that he started as a client of a regulated exchange platform, although his account was closed after multiple transactions were identified as suspicious by the operators. The defendant opted to use Bitfinex, an exchange platform in Hong Kong (also under police investigation) until he decided to launch his own platform in 2016. During that period, Burrell, in complicity with another individual (dedicated to the trade in precious metals), carried out operations with a value close to $1M USD.
According to ethical hacking training specialists, Burrell guaranteed anonymity to his customers by conducting unregulated financial operations, which would have favored criminal organizations that required getting their earnings laundered, mentioned the U.S. prosecutors.