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.
