A man from California will plead guilty to the charges against him for operating an illegal Bitcoin business. It was said that he exchanged about $25 million in Bitcoin, through cryptocurrency ATMs and in-person transactions. Most of the money laundered was proceeds from criminal activities, the US Department of Justice (DOJ) noted.
$25M exchange via illegal Bitcoin business
The 36-year-old Yorba Linda man, namely, Kais Mohammad, operated an illegal Bitcoin business dubbed Herocoin, between December 2014 to November 2019. Through Herocoin, he rendered cryptocurrency to fiat exchange, particularly Bitcoin, and charged as high as 25 percent as the exchange fee.
According to the DOJ, he promoted the Bitcoin business across online platforms, informing the public within Southern California that he handles up to $25,000 in Bitcoin exchange. He exchanged cryptos in-person with clients at public locations, knowing that most of the funds were proceeds from criminal acts.
Later on, Mohammad expanded his illegal Bitcoin business to include Bitcoin ATMs. He purchased, advertised, and installed the machines in many locations, like gas stations, malls, convenience stores, and so on. The internet-based machines allowed people to exchange their cryptos for fiat, while Mohammad supervised and controlled the server.
Mohammad knowingly operated an illegal Bitcoin business
All this time, Mohammad knowingly operated an illegal Bitcoin exchange, as he failed to register Herocoin with the appropriate authorities. Mohammad knew he was expected to implement Anti-money laundering policies and report dubious and high transactions above $10,000, yet he ‘chose not to’ do so.
Although Mohammad later registered Herocoin operations, after the FinCEN reached out to him in July 2018, he still couldn’t comply with certain laws amid checking money laundering. A $14,500 Bitcoin transaction between Mohammad and an undercover agent proved that he wasn’t reporting high volume transactions either, as required.
Having admitted to the charges against him, he will plead guilty next week. He is likely to face a statutory maximum sentence of 30 years in jail. He will also forfeit digital currencies, cash, and about 17 crypto ATMs.