The U.S. Department of Justice has indicted Jacob Burrell Campos, a Mexican resident, for his Bitcoin dealing operation that spanned across international borders. The Assistant United States Attorney General says “Burrell’s activities ‘blew a giant hole’ through the legal framework of U.S. anti-money laundering laws by soliciting and introducing into the U.S. banking system close to $1 million in unregulated cash”. Campos is being held without bail. Due to his residency in multiple countries, disdain towards the United States, and large amounts of cash, he is considered a flight risk.
Bitcoin dealing used to be one of the most popular ways to purchase Bitcoin before the proliferation of Bitcoin ATMs and exchanges. Essentially, Bitcoin dealing is peer to peer trading, but some of the traders become big and start trading large amounts of Bitcoin, and assume the title of Bitcoin dealer. Due to the ease of access to Bitcoin ATMs and exchanges in the United States at this time, it is an unfortunate fact that anyone paying an extra premium of 10-20% and spending extra time to buy Bitcoins from a Bitcoin dealer is probably doing something illegal with the Bitcoins. The United States is aggressively cracking down on Bitcoin dealers, what was once an honorable position has become a crime.
Campos sent USD 1 million from Mexico into the United States to avoid reporting his earnings, which is what specifically got him busted. He transacted USD 3 million of Bitcoin over the course of thousands of transactions, USD 900,000 of which was sent to Bitfinex in Taiwan after his Coinbase account was closed. It is quite common for Bitcoin dealers to be banned from exchanges and platforms for sending and receiving money; ironically this leads to a Bitcoin dealing operation being even harder to trace and harder to stop.
Campos accepted cash for Bitcoins without asking any questions, which is a common and respectable way for Bitcoin dealers to operate. He says he only charged 5%, but this seems too low, Bitcoin dealers can easily charge up to 30% especially since most people using a Bitcoin dealer instead of a Bitcoin ATM are criminals.
The Department of Justice has hit Campos with 31 charges, including operating an illegal money transmitter business, not maintaining an anti-money laundering program, international money laundering, and conspiracy to structure monetary transactions, which means breaking up transactions to avoid reporting. Overall he will probably lose all the money he has and spend several years in prison. Campos is in a very bad position since he can’t bail out, which will make him desperate to cut a deal as fast as possible.
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