The end of the road has finally come for the Rosarito, Mexico-based bitcoin dealer Jacob Burrell Campos, a US citizen who will forfeit more than $800k in ‘ill-gotten gains, according to the government.
The 22-year-old admitted to running an illegal, unlicensed Bitcoin exchange that preyed on unsuspecting U.S. Bitcoin buyers and traders. More than 1,000 customers did business with Burrell Campos.
For his crimes, he will also serve two years in prison.
Burrell Campos isn’t some infamous, major criminal mastermind. He simply facilitated bitcoin trading without having a license or the exchange he set up to operate. However, his sentencing shows that the US is serious about punishing crypto-related criminals, even though it’s been slow to move on regulations.
At the end of October, he admitted that he operated a Bitcoin exchange without registering with the Financial Crimes Enforcement Network (FinCEN). He also admitted to not having an anti-money laundering or “know your customer” program in place, as required.
Finally, he acknowledged that he’d done no due diligence on the source of his customers’ money, according to the Justice Department.
Here’s an excerpt from the Justice Department:
Burrell admitted that, at first, he purchased his supply of Bitcoin through a U.S.-based, regulated exchange, but his account was soon closed because of the large number of suspicious transactions. He then resorted to a cryptocurrency exchange in Hong Kong, where he purchased a total of $3.29 million in Bitcoin, in hundreds of separate transactions, between March 2015 and April 2017.
Burrell Campos’ scheme started in 2016. Then, he started exchanging his US cash, which he kept in Mexico, with a player named Joseph Castillo. Burrell Campos and the San Diego-based precious metals dealer imported into the U.S. more than $1 million. To avoid detection, they did so in chunk below the $10,000 reporting requirement.
According to the plea agreement, Burrell Campos advertised his business on Localbitcoins.com. It entailed:
- communicating with customers through email and text messages, often using encrypted applications
- negotiating a commission of five percent above the prevailing exchange rate
- accepting cash in person, through nationwide ATMs, and through MoneyGram