US Courts Are Coming After Crypto Exchanges That Skirt Sanctions

Cryptocurrencies have been around for a long time It is considered the Wild West of money transfer, but few online payment and remittance platforms blatantly attract illegal cash like this one. Platform, marked but not named in an opinion in mind sealed May 13 in US District Court in Washington, DC, based in a “comprehensively sanctioned country” – possibly North Korea, according to people in the crypto law space – and advertises its services as evading US financial sanctions. It was built using a US front company to facilitate domain name purchases, according to court filings.

The platform, designed to circumvent a financial ban designed to cripple pariah countries, processed over $10 million worth of bitcoins transferred between the US and the sanctioned country using an exchange US-based crypto exchange, in the opinion, is unaware that it is helping to avoid sanctions.

Idea, written by Judge Zia Faruqui, was likely sealed because someone was arrested for operating a cryptocurrency platform. They all mark a shift in the way U.S. law enforcement — and the law — handles cryptocurrencies.

“Problem one: cryptocurrencies can’t be tracked? WRONG. … Problem second: sanctions don’t apply to cryptocurrencies? WRONG,” concluded Faruqui in his view, directly continue to quote two Saturday night live The skit parodies TV presenter and political commentator John McLaughlin, who is known for his direct style.

Ari Redbord, head of legal and government at TRM Labs, which monitors crypto fraud and financial crime, said: “For a while now, we’ve been hearing a narrative that money is money. Electronics can be used to evade sanctions. “What we see here is the first time the Department of Justice has charged a criminal case involving the use of cryptocurrency to evade sanctions.”

This decision makes crypto exchanges aware that they can be held accountable for allowing users to circumvent sanctions — knowingly or not — and is a warning to those trying to evade sanctions that law enforcement is about to impose on them.

For years, cryptocurrencies have been seen as a safe haven for criminal gangs and businesses seeking to launder money for illicit profits. Unlike bank accounts, cryptocurrencies do not require a name attached to transactions, which are recorded on a public blockchain ledger. This apparent anonymity attracted criminal businesses in the early days of cryptocurrencies like bitcoin. “You had Silk Road of the world and AlphaBays,” said Jessie K. Liu, partner at law firm Skadden, Arps, Slate, Meagher & Flom. A former deputy general counsel at the US Treasury Department who also served in the Justice Department, Liu has prosecuted a number of cryptocurrency cases. “The initial reporting of bitcoin made it a secret, anonymous currency that the bad guys used to do bad things.” Bitcoin’s founding principles – and the liberal, privacy-loving, decentralized stance that spawned it – also introduce the realization that virtual currencies are untraceable.

What all those groups and individuals overlook is that the foundation of cryptocurrencies – the immutable blockchain that keeps a record of every transaction made – is under construction. evidence store for prosecutors. “What is so unique about cryptocurrencies is that you can actually track and track the flow of these funds on a completely open ledger,” said Redbord. “Just because cryptocurrencies move and live on an open ledger on the blockchain allows this kind of investigation.”

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