Avoiding Sanctions with Cryptocurrency? US Govt Files First Criminal Charges (msn.com) 30
Last week America's Justice Department "launched its first criminal prosecution involving the alleged use of cryptocurrency to evade U.S. economic sanctions," reports the Washington Post. They cite a nine-page opinion from a federal judge approving the government's criminal complaint against an American "accused of transmitting more than $10 million worth of bitcoin to a virtual currency exchange in one of a handful of countries comprehensively sanctioned by the U.S. government: Cuba, Iran, North Korea, Syria or Russia.
"In the ruling, the judge called cryptocurrency's reputation for providing anonymity to users a myth." He added that while some legal experts argue that virtual moneys such as bitcoin, ethereum or Tether are not subject to U.S. sanctions laws because they are created and move outside the traditional financial system, recent action taken by the Treasury Department's Office of Foreign Assets Control [OFAC] require federal courts to find otherwise.
"Issue One: virtual currency is untraceable? WRONG ... Issue Two: sanctions do not apply to virtual currency? WRONG," Faruqui wrote...
"The Department of Justice can and will criminally prosecute individuals and entities for failure to comply with OFAC's regulations, including as to virtual currency," Faruqui said. In the opinion, Faruqui wrote that he adopted guidance issued in October by OFAC, which stated that sanctions regulations apply equally to transactions involving virtual currencies as those involving the U.S. dollar or other traditional fiat currencies.
Ari Redbord, who served in 2019 and 2020 as a senior adviser to the Treasury Department's undersecretary for terrorism and financial intelligence, called the case the first U.S. criminal prosecution targeting solely the use of cryptocurrency in a sanctions case. He said the ruling made clear such conduct is traceable and "immutable — in other words, transactions using cryptocurrency are forever.... What we are seeing is that the Department of Justice is going to actively go after actors that attempt to use cryptocurrency, but also that it is hard to use cryptocurrency to evade sanctions," Redbord said. "It shows, in many respects, cryptocurrency is not a good tool for sanctions evasion or money laundering."
In this case, The Register reports, "An unnamed American citizen allegedly used a US-based IP address to run an online payments platform" in a sanctioned country. The service advertised itself as being "designed to evade US sanctions" and claimed its transactions were untraceable, it was alleged. We're told the defendant bought and sold Bitcoin using a US-based online currency exchange using fiat currency from a US bank account.
The Post argues that this prosecution represents "a new U.S. criminal sanctions enforcement push targeting cryptocurrency transactions at a time of rising concern over the extent to which illicit actors can use or are using such methods to launder money or do business with countries the United States has cut off from the dollar..."
"In the ruling, the judge called cryptocurrency's reputation for providing anonymity to users a myth." He added that while some legal experts argue that virtual moneys such as bitcoin, ethereum or Tether are not subject to U.S. sanctions laws because they are created and move outside the traditional financial system, recent action taken by the Treasury Department's Office of Foreign Assets Control [OFAC] require federal courts to find otherwise.
"Issue One: virtual currency is untraceable? WRONG ... Issue Two: sanctions do not apply to virtual currency? WRONG," Faruqui wrote...
"The Department of Justice can and will criminally prosecute individuals and entities for failure to comply with OFAC's regulations, including as to virtual currency," Faruqui said. In the opinion, Faruqui wrote that he adopted guidance issued in October by OFAC, which stated that sanctions regulations apply equally to transactions involving virtual currencies as those involving the U.S. dollar or other traditional fiat currencies.
Ari Redbord, who served in 2019 and 2020 as a senior adviser to the Treasury Department's undersecretary for terrorism and financial intelligence, called the case the first U.S. criminal prosecution targeting solely the use of cryptocurrency in a sanctions case. He said the ruling made clear such conduct is traceable and "immutable — in other words, transactions using cryptocurrency are forever.... What we are seeing is that the Department of Justice is going to actively go after actors that attempt to use cryptocurrency, but also that it is hard to use cryptocurrency to evade sanctions," Redbord said. "It shows, in many respects, cryptocurrency is not a good tool for sanctions evasion or money laundering."
In this case, The Register reports, "An unnamed American citizen allegedly used a US-based IP address to run an online payments platform" in a sanctioned country. The service advertised itself as being "designed to evade US sanctions" and claimed its transactions were untraceable, it was alleged. We're told the defendant bought and sold Bitcoin using a US-based online currency exchange using fiat currency from a US bank account.
The Post argues that this prosecution represents "a new U.S. criminal sanctions enforcement push targeting cryptocurrency transactions at a time of rising concern over the extent to which illicit actors can use or are using such methods to launder money or do business with countries the United States has cut off from the dollar..."
Re: (Score:2)
Re: (Score:2)
Wal Mart has 8 inch wrenches for less than $5. (Leaving out the URL because this isn't an ad.)
You probably would need to pay more for a bigger one, but that would likely kill.
Re: (Score:1)
Not really dated when the mouseover / title text has always said "Actual actual reality: nobody cares about his secrets. (Also, I would be hard-pressed to find that wrench for $5.)"
Re: (Score:3)
Took 'em long enough. (Score:2, Insightful)
One of the sovereign powers of any nation is the power to regulate commerce (and the power to create and control the use of currency). The crypto bros are finally going to run into that simple truth here in the US. Cryptocoin (as presented) is either counterfeit money, or the heavily encrypted ledger of a Ponzi scheme.
"Hey, DOJ! What took you so long?"
Re:Took 'em long enough. (Score:5, Informative)
No, they didn't. They declared that it is property, with value set by the market. Currency is a very small subset of property. Land, copyright, commodities, are all other forms of non-currency related property.
Feature Laundering (Score:2)
If you can't launder money what's the use of anonymous currency?
Re: Feature Laundering (Score:1)
Re: (Score:3)
Who ever said Bitcoin, Ethereum, etc is anonymous currency?
There are anonymous currencies. They're fungible.
Looking at facts is non-optional (Score:2)
At least when you are doing things that some other people do not want you to do. The cloud of myths around crypto-"currencies" is a thick smog, but the facts are not to hard to see if you really try and paint an entirely different picture than the fantasies routinely pushed by its proponents.
Re: (Score:2)
The dream fades (Score:4, Funny)
I guess the "total anonymity" bit about crypto was a wee bit oversold. Or so it seems.
Possibly too much wishful thinking was involved.
Re: (Score:1)
Yes, the anonymity promise was a lie, so too the promise that it was an alternative to cash as it is accepted nowhere but only converted to money at transaction time. Cryptocoins fail all the tests of money, and as bonus are not insured like a bank balance is.
The cryptocoin farce is almost over I think, the "stablecoin" farce it spawed has already crashed and burned.
Don't be a bag holder, get the hell out of cryptocoin.
Re: (Score:2)
I guess the "total anonymity" bit about crypto was a wee bit oversold. Or so it seems.
Possibly too much wishful thinking was involved.
Right now, it seems that if a government, and specifically the US government, wants to find out who you are, yeah, "total anonymity" may not exist. However, it's worth noting that the recent Luna/USDT crash debacle happened after approximately $3 billion worth of Luna was removed from Anchor Protocol. All the parties involved in running Luna swear they have no idea at all nor any way to find out what single person or entity moved so much money out at one time, so they don't know what their motivation wa
Re: (Score:3)
As I've said before, crypto is completely anonymous.
What is NOT anonymous are all the exchanges that popped up to convert your crypto into actually useful money and to buy it with that same actual money.
Re: (Score:3)
Right. I have heard administration officials call those "on ramps" and "off ramps" in press conferences.
Wouldn't this be super easy (Score:3, Insightful)
The best part is you can then seize all the cryptocurrency they have under existing asset forfeiture laws. Sure eventually the market will collapse but then at that point you don't care anymore.
Vladimir Putin invading Ukraine was one of the worst things that could happen to crypto because it means there's a lot of pressure to crack down on money laundering.
Re: (Score:1)
Technically, yes. If you knew someone's wallet address, you could send them "tainted" coinage and watch 'em squirm if they tried using it on an exchange which seizes tainted funds.
The catch is, it's probably not so easy to get ahold of coins that have ended up on a blacklist.
Re: (Score:2)
That would require some understanding of the field and the competence to execute before the target has retired to Mars. Federal law enforcement, like the FBI Computer Crime Lab and the SEC, have not been demonstrating legal or investigation competence.
They're slow (Score:2)
The FBI are not rank and file cops.
Re: (Score:2)
The FBI Computer Crime lab is grossly incompetent. They do not investigate, or help prosecute, the crimes for which they str provided abundant evidence by others, and they do no themselve competently investigate anything. Can you find a single case in the last 20 years where the FBI computer crime lab provided any useful investigation whatsoever? Can you find any competent prosecutions in computer crime assisted by the FBI? Even one?
If you trust the FBI, look at the Kevin Mitnick and Aaron Swartz cases and
Tips for where to start business to avoid DOJ (Score:1)
I don't understand that peoples starts a business that the DOJ may dislike in the US facing the full wrath of the DOJ instead of researching where they could start one with no extradition treaty with the US, that the US has no beef with and access to US capital markets and where the US has never sent drones(ie: not in iraq/afghanistan) or military forces(ie: not in Australia) or compelled the country to use military forces(ie: Sweden/NATO countries) to execute a DOJ warrant.
As for the UN, make sure that you
is Monero traceable now? (Score:2)
does this include monero or even litecoin with mweb?
or is he purposefully lumping all cryptocurrencies together to scare all crypto users?
LIBERALS STIFLING FREE SPEECH!!! (Score:2)
Isn't it the right of any American to support the ideas they believe in? Money is just another kind of speech: the best kind, where wealthy people can speak more than poors and things actually get done. A deluded Communist has just as much right to support North Korea as a patriotic American has to support death squads in whatever country is convenient at the moment.
Re: (Score:2)
Money isn't speech or property. It is a token to represent property, but isn't property in itself. Which means the Constitution doesn't protect it.
Re: (Score:2)
No, it actually does, as proven by Citizens United. You're thinking of the "right" to destroy fetus.