DOJ Charges Crypto Exchange Operator With Laundering Silk Road Proceeds

Maximiliano Pilipis, a 53-year-old former resident of Noblesville, Indiana, has been indicted by a federal grand jury on 5 counts of cash laundering and two counts of failing to file a tax return.

The indictment alleges that Pilipis laundered substantial funds, together with proceeds from Silk Highway, via his operation of an unlicensed digital foreign money change known as AurumXchange.

Laundering Silk Highway Proceeds

Courtroom paperwork revealed that Pilipis launched AurumXchange in 2009 and ran it as much as 2013. The platform allowed folks to change Bitcoin and different digital currencies for U.S. {dollars} and varied worldwide currencies. AurumXchange reportedly facilitated greater than 100,000 transactions totaling over $30 million in exchanged funds.

In return for its companies, the platform charged charges that allowed Pilipis to amass over 10,000 BTC, valued at round $1.2 million on the time.

Nevertheless, prosecutors say the platform operated with out correct licensing, oversight, or compliance with federal laws. U.S. legislation requires cash transmitters to confirm buyer identities, report transactions to the U.S. Treasury, and preserve information to guard the nation’s monetary system and nationwide safety.

The U.S. Division of Justice argues that Pilipis bypassed these safeguards by permitting transactions from nameless accounts, some allegedly linked to the defunct Silk Highway on-line market.

Created in 2011 and shut down in 2013, the platform was a darknet conduit that enabled the unlawful sale of medicine and different illicit items utilizing cryptocurrency to take care of anonymity.

In accordance with the company, Silk Highway prospects used AurumXchange to transform crypto into fiat foreign money whereas avoiding detection and identification, thus facilitating cash laundering.

Tax Evasion Expenses

The case additionally alleges that after stopping operations in 2013, the indictee started splitting, transferring, and concealing the Bitcoin proceeds from AurumXchange to cover the origins of the funds.

In 2018, he transformed parts of the digital foreign money into U.S. {dollars}, investing in actual property properties in Arcadia and Noblesville, Indiana, amongst different expenditures. Over 2019 and 2020, the 53-year-old reportedly generated a whole lot of hundreds of {dollars} in earnings, however he didn’t submit federal earnings tax returns.

“Combatting the felony misuse of cryptocurrencies and different digital belongings is a vital precedence for the Division of Justice,” stated U.S. Legal professional Zachary A. Myers for the Southern District of Indiana.

If discovered responsible of all expenses, Pilipis might resist 10 years in federal jail and a positive of as much as $250,000. His sentence will probably be decided by a federal district courtroom decide who will take into account varied components, together with the U.S. Sentencing Tips.