The Department of Justice in the United States has sued popular crypto exchange AurumXchange for alleged involvement in money laundering activities. In a statement by the DOJ, AurumXchange alleging processed millions in illicit funds for the darknet marketplace, Silk Road.
In the statement, it was specified that one Maximiliano Pilipis who operated the exchange enabled approximately $30 million in funds across 100,000 transactions using AurumXchange. Meanwhile, a substantial portion of this fund was gotten from accounts held on the Silk Road.
Don’t forget there have been various allegations pointing to the usage of the Silk Road marketplace by thousands of drug dealers. The marketplace operated from 2011 to 2013 under the Dread Pirate Roberts and was managed by American Ross Ulbrich. Based on the Tor network, Silk Road allowed users to trade products anonymously. This posture, allegedly paved the way for bad actors to leverage the project for their illicit transactions.
AurumXchange accepts millions in fees for processing illegal transactions – DOJ
AurumXchange also operated within that period without a license and accepted millions in fees for processing those funds, including 10,000 Bitcoin, equivalent to $1.2 million at the time.
The DOJ says Pilipis while operating AurumXchange disobeyed federal laws guiding financial service providers in the country. In the statement, it alleged that the exchange never went through federal registration or filed reports of its activities. Likewise, AurumXchange, according to the DOJ never implemented Know Your Customer (KYC) guidelines. This act violates the Anti-Money Laundering (AML) and counter-terrorism financing (CTF) laws in the country.
After closing down, the DOJ says Pilipis split the funds and transferred Bitcoin and other crypto assets gained from AurumXchange so as to launder and hide the proceeds of the offenses. Likewise, he is alleged to have converted his crypto holdings into US dollars. These funds, according to the authorities, have been diverted to real estate investments in Arcadia and Noblesville, Indiana.
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