California DOJ Cracks Down On Illegal Bitcoin ATM Business

The California DOJ cracks down on an illegal Bitcoin ATM business that ended up sentencing Kais Mohammad for money laundering as we can see more in our latest crypto news today.

Kais Mohammad was sentenced to two years in prison after he pleaded guilty as he operated an unlicensed virtual currency business and managed to launder between $15 million and $25 million in BTC and cash. Between 2014 and 2019 he owned and operated “Herocoin” and then used the nickname “Superman29” to advertise his business online and have customers buy and sell BTC for cash in transactions of up to $25,000. He charged a 25% commission on these transactions which was a huge mark up from the standard rate.

These operations were distinct from the fleet of BTC ATM kiosks where the users can buy and sell BTC without having to go through all identification procedures. He also allowed customers to conduct a few consecutive transactions of $3,000 each. It is still not clear how different these machines were different from the regular ATMs. He knew that some of the client’s funds came from illegal activities and Mohammad was aware that the funds were proceeds of crime originating from the dark web.

Ciaran McEvoy who is a spokesperson for the California DOJ said that Mohammad was a former employee in the banking industry and he was aware that he was required to register his activity with the US Treasury Financial Crimes Enforcement Network. The prosecutors said:

“Rather than use his knowledge to create a robust compliance program, Mohammad avoided one altogether and profited by making his business an efficient, unchecked, and nearly anonymous conduit for money laundering and other crimes.”

McEvoy said that Mohammad was likely aware that his activity fell under money laundering regulations as well as the need to file currency transaction reports and conduct due to dillgence on the customers with file suspicious activity reports for transactions over $2000 that he knew or had any reason to suspect were involved in criminal activity. Mohammad didn’t report this information and after being contacted by the FinCEN, he registered his company activity but continued to drop short of the regulatory requirements.

Source: https://www.dcforecasts.com/bitcoin-news/california-doj-cracks-down-on-illegal-bitcoin-atm-business/