US man faces jail time for unlicensed Bitcoin sales on LocalBitcoins
The US Department of Justice (DOJ) has gone after someone for purchasing Bitcoin (BTC) on LocalBitcoins.com. According to a press release on the DOJ website, Jacob Burrell Campos was operating an "unlicensed money transmitting business" via the site and now faces up to five years in prison.
Campos appeared before a judge yesterday in San Diego and pleaded guilty to the charges. He had been accused of "selling hundreds of thousands of dollars" in BTC to more than 1,000 customers throughout the US between January 2015 and April 2016. Because of the high volume of activity, the DOJ had accused him of operating an unregistered BTC exchange.
An attorney for the DOJ, Adam Braverman, stated, “Unlicensed money transmitting businesses, especially those operating at or near the border, pose a serious threat to the integrity of the US banking system, and provide an ‘open door’ for criminals to utilize such businesses to launder the proceeds of their illicit activities.”
As an exchange, Campos would have been required to register with the US Financial Crimes Enforcement Network (FinCEN) and to incorporate anti-money laundering measures. He admitted to not adhering to the requirements and acknowledged that he conducted transactions at a rate of 5% above market rates. He also acknowledged that he had been banned by a US-based cryptocurrency exchange after it determined there were "suspicious" transactions associated with this account.
As part of his plea deal, Campos will pay the DOJ $800,000. He is expected to be sentenced on February 11 of next year.