The United States is the first to file a criminal complaint against cryptocurrency bans

Placeholder when article work is loaded

The judiciary has started its first criminal trial involving the accused The use of cryptocurrencies to evade U.S. economic sanctions was revealed by a federal judge on Friday.

In an unusual nine-page opinion, U.S. Magistrate Judge J. M. Farooqi of Washington, D.C., explained why he approved a forensic criminal complaint against an American citizen accused of sending more than $ 10 million worth of bitcoin to a virtual currency exchange. Among the few countries widely approved by the US government are: Cuba, Iran, North Korea, Syria or Russia.

In the ruling, the judge called the reputation of the cryptocurrency a myth for providing anonymous users. He added that although some legal experts argue that virtual money such as Bitcoin, Etherium or Tether are not subject to U.S. sanctions because they are created and go beyond the traditional financial system, the Treasury Department’s Foreign Asset Control Office’s recent move is needed. Federal courts find otherwise.

Issue One: Can’t find virtual currency? Wrong. . . Issue Two: Doesn’t the ban apply to virtual currencies? Wrong, “writes Farooqi, acknowledging and acknowledging the late American political commentator John McLaughlin’s steakato-delivery style and his long-running television show, the steakato-delivery style of” The McLaughlin Group “.

“The judiciary can and will prosecute individuals and entities for failing to comply with OFAC regulations, including virtual currency,” Farooqi said.

In the comments, Farooqi wrote that he accepted the guidelines issued by OFAC in October, stating that the prohibition rules apply equally to transactions involving virtual currencies, such as those involving the US dollar or other traditional fiat currencies.

The opinion did not name the accused and the underlying case remained sealed – as is often the case in an ongoing investigation – after court, in consultation with prosecutors, concealing information that would identify the subject or witnesses.

Nevertheless, the prosecution represents a new U.S. criminal sanctions enforcement push targeting cryptocurrency transactions, raising concerns about whether illegal actors could use or use such methods to smuggle money or do business with countries that the United States has isolated. Dollars, the lifeblood of international money.

Will Russia use crypto to block US sanctions? Some policymakers sounded the alarm

In March, Attorney General Merrick Garland said a law enforcement task force in response to Russia’s aggression in Ukraine would “among other things” target efforts to use cryptocurrencies to avoid US sanctions. Earlier this year, the Justice Department announced the seizure of its largest virtual currency after arresting a New York couple accused of trying to smuggle বি 3.6 billion in stolen bitcoin.

This month, the Treasury Department said A cryptocurrency has imposed its first sanctions against “Mixer” for helping to unravel the source of hacked funds, including the North Korean government-linked network Lazarus Group, which is accused of stealing an estimated $ 1.75 billion in cryptocurrencies to support the country. Illegal nuclear missile and weapons development program.

Ari Redboard, who served as senior adviser to the Treasury Department’s Under Secretary for Terrorism and Financial Intelligence in 2019 and 2020, called Friday’s case the first U.S. criminal case to target the use of cryptocurrencies only in sanctions cases. He said the ruling made it clear that such behavior could be detected and was “irreversible – in other words, transactions using cryptocurrency are permanent.”

“What we’re seeing is that the judiciary is going to actively pursue actors who try to use cryptocurrency, but it’s hard to use cryptocurrency to avoid sanctions,” Redboard said. “It shows that, in many cases, cryptocurrency sanctions are not a good tool for evasion or money laundering.”

Fed arrests married couple, seizes $ 3.6 billion hacked bitcoin funds

U.S. authorities filed a complaint in March alleging that an authorized country had set up a PayPal-type payment platform system to assist defendants, according to Friday’s ruling. It said investigators were able to use state-of-the-art blockchain analysis tools to identify the person’s actions, since despite the anonymous nature of cryptocurrency, all individual account transactions are recorded on public ledgers that can be stored in large data sets.

The $ 10 million bitcoin payments originated in the United States and were passed on to customers of the payment platform, according to a U.S. law enforcement affidavit. The platform advertised its services as designed to evade American sanctions, and the defendant “proudly stated” that it could do so using bitcoin despite knowing the country was blacklisted, the ruling said.

The opinion states that investigators were able to track “(virtual) money” and identify their targets using subpona returns synthesized from the United States – and a foreign-based virtual currency exchange – such as Binance or Coinbase – used by the defendant. The suspects used the first exchange funds with them, as well as banking information from a traditional US financial institution. Investigators also used email search warrant return and shell company registration information.

In particular, the defendant conspired to operate a payment and remittance system in the United States using an Internet address, including establishing a U.S.-based front company to assist in the purchase of the domain, using U.S. financial accounts to assist it and its clients, and Bitcoin. Involved in sending. In his respective account, the court said.

Both exchanges were accessed from the Internet address searched by the defendant’s home and the two accounts receiving foreign exchange were accessed from an Internet address in the authorized country, sometimes within minutes, according to the verdict.

Farooqi concludes that there was a good reason to believe that the transfer of virtual currency to a country authorized by the defendant violated U.S. law, and that the person facing liability for violating the two exchange bans, even if possibly unintentionally. Foreign exchange becomes subject to U.S. regulations when it knowingly “returns financial services – including virtual currency that originated in the United States or came from a U.S. citizen” to a prohibited recipient, the court found.

Related Posts

Leave a Reply

Your email address will not be published.