First enforcement action against a peer-to-peer virtual currency exchanger

magneto

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Quote from: buwaytress on April 26, 2019, 03:10:38 PM

Quote from: magneto on April 25, 2019, 06:54:35 PM

-snip-

Yep! Even since 2016 (at least to my knowledge, probably farther back) people already know trading on LBC gets them in trouble. I'm not sure using other p2p platforms help them, end of the day cash transfers and money transfers, once they start happening regularly, puts up very big red flags.

Guy also did it in 2012, he also admitted to them, so they're probably taking all that into account for leniency. Not sure people would get away with less should they get caught doing the same things today.

It might also have something to do with the prosecuting party being FinCEN as opposed to the FBI. I'm not entirely sure about this, though, and it's only speculation on my part.

At the end of the day, regardless of what seems to be leniency from the regulator's part, it doesn't mean that everyone will get away with the same sort of treatment, because previous cases of similar nature we can confirm resulted in imprisonment for some.

Just make sure that if you are indeed regularly advertising on p2p platforms, and dealing with commercial volumes of BTC all the time in your transactions, you are aware of the regulations and reporting obligations. Otherwise you could land in trouble.

Mahanton

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Quote from: creeps on April 26, 2019, 03:04:46 AM

Quote from: avikz on April 25, 2019, 01:04:48 PM

I am seeing two violations by the trader from the thread,

1. Failure to file Currency Transaction Report which is mandatory for any transaction above 10k USD.
2. Involvement with Silk Route by processing numerous suspicious transactions which is infamous for illegal deals

In my country, I would be jailed immediately!

In my country, you just need to pay for the fine and you're free to go.
Aside from the scamming incidents, there's no violation like this here in my place maybe a lot of people here are still not knowledgeable about cryptocurrency and very few are transacting money through cryptocurrency. If there's a rules or any regulations by the government with your place especially if its beyond the limit, then comply with it or else you will be put in the jail and fine for a bigger fees, AMLA will also run to you if there's a big changes on your bank account.

Each country do have different level when it comes to restriction or law imposing specially with tax matters.For some places on the world they arent really too strict which you can still
possible able to bail out and pay up some fees and youre good to go but for other countries which are too strict implementing these things will really put you into big trouble.
Checking out that trader, if you would be caught up with these transactions you would really be 100% questioned.

buwaytress

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Quote from: magneto on April 25, 2019, 06:54:35 PM

Quote

Mr. Powers sold/bought some Bitcoins via personal, through the mail, and by wire through a depository institution.

Where he made more than 160 purchases of BTC through in-person cash transactions in public places such as cafes. In addition to some illegal activities such as the use of Darknet forums "Silk Road," without verifying the identity and checking funds.

It might be FinCEN's first crackdown on these P2P exchangers, but it's certainly not the first time that it's happened.

There has been plenty of instances in the past where LBC sellers have been convicted due to the fact that they were selling conducting extremely large trades while never asking for KYC, nor reporting to the financial regulators.

It's interesting though that this guy got off with a fine and a probation, while others have been sentenced. Perhaps it's a difference in scale. Also, it seems like that advertisers, or "makers", are the most prone targets, while the responders of these ads are not really at risk.

Yep! Even since 2016 (at least to my knowledge, probably farther back) people already know trading on LBC gets them in trouble. I'm not sure using other p2p platforms help them, end of the day cash transfers and money transfers, once they start happening regularly, puts up very big red flags.

Guy also did it in 2012, he also admitted to them, so they're probably taking all that into account for leniency. Not sure people would get away with less should they get caught doing the same things today.

sheenshane

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As a beginner without any knowledge in lawsuits, this thing is really one most mistake of the people who are currently starting their career in finance. Peer to peer exchanges is legal for at least two to three attempts with a small number of exchanges. However, if you are making activities with the peer to peer in a very much amount of time, that is the time where law and regulators will chase you.

Mr. Powers should now start to study laws and secure himself with these enforcement transactions. One good lawyer and one good accounting are enough.

erikalui

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In India, this would definitely be considered a crime as the exchanger hasn't asked for any ID documents while exchanging such big amounts and plus there is a ban on liquidating crypto currencies. So many users have been jailed for such suspicious transactions but they still don't stop.

creeps

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Quote from: avikz on April 25, 2019, 01:04:48 PM

I am seeing two violations by the trader from the thread,

1. Failure to file Currency Transaction Report which is mandatory for any transaction above 10k USD.
2. Involvement with Silk Route by processing numerous suspicious transactions which is infamous for illegal deals

In my country, I would be jailed immediately!

In my country, you just need to pay for the fine and you're free to go.
Aside from the scamming incidents, there's no violation like this here in my place maybe a lot of people here are still not knowledgeable about cryptocurrency and very few are transacting money through cryptocurrency. If there's a rules or any regulations by the government with your place especially if its beyond the limit, then comply with it or else you will be put in the jail and fine for a bigger fees, AMLA will also run to you if there's a big changes on your bank account.

Snaic

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In my country (Ukraine), any transactions in cryptocurrency are not yet a violation, since we do not yet have statutory rules when using cryptocurrency. I can be held responsible only in accordance with the legislation of my country and international standards, which are signed and ratified by the legislative body of my state.
In the future, of course, the regulation of cryptocurrency will definitely be.

magneto

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Merit: 753

Quote

Mr. Powers sold/bought some Bitcoins via personal, through the mail, and by wire through a depository institution.

Where he made more than 160 purchases of BTC through in-person cash transactions in public places such as cafes. In addition to some illegal activities such as the use of Darknet forums "Silk Road," without verifying the identity and checking funds.

It might be FinCEN's first crackdown on these P2P exchangers, but it's certainly not the first time that it's happened.

There has been plenty of instances in the past where LBC sellers have been convicted due to the fact that they were selling conducting extremely large trades while never asking for KYC, nor reporting to the financial regulators.

It's interesting though that this guy got off with a fine and a probation, while others have been sentenced. Perhaps it's a difference in scale. Also, it seems like that advertisers, or "makers", are the most prone targets, while the responders of these ads are not really at risk.

avikz

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I am seeing two violations by the trader from the thread,

1. Failure to file Currency Transaction Report which is mandatory for any transaction above 10k USD.
2. Involvement with Silk Route by processing numerous suspicious transactions which is infamous for illegal deals

In my country, I would be jailed immediately!

dothebeats

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Even if it's a small-time P2P currency exchange service, Mr. Powers is still subjected to FinCEN regulations and laws for AML and KYC, so I'm not surprised that he got nabbed by law enforcement the second they had the chance. This should serve as a concrete example that today, anyone dealing with illegal transactions are susceptible to spending time behind bars for going against the law. He was already acting and dealing with people like a normal money exchanger does, so I think it's about time for him to get the paper works and legal matters declared and filed if he really wanted to pursue his activities.

hugeblack

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Mr. Powers sold/bought some Bitcoins via personal, through the mail, and by wire through a depository institution.

Where he made more than 160 purchases of BTC through in-person cash transactions in public places such as cafes. In addition to some illegal activities such as the use of Darknet forums "Silk Road," without verifying the identity and checking funds.

Quote from: https://www.fincen.gov/news/news-releases/fincen-penalizes-peer-peer-virtual-currency-exchanger-violations-anti-money

FinCEN notes that this is its first enforcement action against a peer-to-peer virtual currency exchanger and the first instance in which it has penalized an exchanger of virtual currency for failure to file CTRs. FinCEN also notes that since his infractions, Mr. Powers has cooperated with FinCEN efforts. In addition to paying a $35,000 fine, Mr. Powers has agreed to an industry bar that would prohibit him from providing money transmission services or engaging in any other activity that would make him a “money services business” for purposes of FinCEN regulations.

Read more : FinCEN Penalizes Peer-to-Peer Virtual Currency Exchanger for Violations of Anti-Money Laundering Laws

Topic: First enforcement action against a peer-to-peer virtual currency exchanger (Read 156 times)