The U.S. government has seized $19 million worth of BTC from a drug trafficker, who allegedly laundered funds through the cryptocurrency on the original dark web marketplace known as “Silk Road.”
The U.S. Attorney’s Office for the Southern District of New York announced the news on Thursday, saying that the trafficker, Hugh Brian Haney, 60, was arrested near Columbus, Ohio. In 2017 and 2018, Haney allegedly transferred bitcoins representing drug proceeds he had earned through Silk Road to an account held at a company involved in the exchange of bitcoin and other cryptocurrencies. He claimed falsely that the source of these bitcoins was from mining.
Haney is charged with one count of concealment money laundering and one count of engaging in a financial transaction in a criminally derived property. The former count carries a maximum jail term of 20 years, while the latter a maximum term of 10 years.
Homeland Security Investigations (HSI) special agent-in-charge Angel M. Melendez said:
“HSI special agents employed blockchain analytics to uncover and seize bitcoins valued at $19 million and usher Haney out of the dark web shadows to face justice in the Southern District of New York.”
U.S. Takes Crypto Crime Seriously with Anti-Money Laundering Reforms
The United States passed into law its Anti-Money Laundering Act of 2020, which takes effect on January 1, 2021. This brings digital currency exchange companies and other digital-asset-related businesses under the scope of regulations of the Bank Secrecy Act (BSA), which requires financial institutions “to actively detect, monitor and report potential money laundering activity.”
“I’m pleased that our anti-money laundering legislation was included as a part of this year’s [National Defense Authorization Act]. This bipartisan legislation protects Americans by depriving criminals and terrorists of the tools they use to finance illicit activity. It is the first serious overhaul of our anti-money laundering system in decades, and it makes sense to include it in the biggest, most important national defense legislation Congress passes each year,” South Dakota Sen. Mike Rounds said in a press release.
The massive anti-money laundering reforms are targeting businesses dealing with digital currencies and assets by clearly specifying the definition of a “financial institution” to “‘a business engaged in the exchange of currency, funds, or value that substitutes for currency or funds” and “a licensed sender of money or any other person who engages as a business in the transmission of funds or value that substitutes for currency.”
The reforms further define a “money transmitting business” to include those who deal with “currency, funds, or value that substitutes for currency.” Now, there are no longer loopholes that digital asset companies can use when dealing with the Financial Crimes Enforcement Network (FinCEN), the agency that enforces the BSA.
Stricter Penalties Enforced
Aside from updating definitions to ensure that digital currency exchange firms and others dealing in digital assets are clearly within the scope of the AML Act of 2020 and the BSA, stricter penalties are now being enforced for crypto criminals.
Now, those who have been found guilty of violating the AML Act of 2020 and/or BSA are faced with fines amounting to profits earned while committing the violation and possible jail time. Those guilty of an “egregious” breach are also going to be banned from taking a board member position of any financial institution in the country for 10 years. Furthermore, employees of financial institutions who commit these crimes will be obligated to return to their employer all bonuses received during the time the act was committed.
FinCEN is being given additional resources, like increasing its manpower, to ensure the enforcement of these reforms. This will further safeguard investors against crypto crimes and nail down digital currency exchange firms and other digital-asset-related businesses that do not comply with BSA regulations.
Bitcoin (BTC) Crosses 55k And Is Heading Towards 60k Fast!
Less than two months into 2021, the price of bitcoin has risen 95.4%.
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Cardano founder, Charles Hoskinson speaks on the future of Bitcoin and taking profits
Charles Hoskinson has always been a huge advocate for decentralized finance and building a network that could provide solutions to the problems with our current financial and banking systems. In this recent AMA Charles speaks out on his view about the issues that Bitcoin faces as well as reminding everyone that cryptocurrency isn’t all about taking profits.