The Department of Justice (DOJ) filed a criminal complaint on May 13th against an American citizen accused of transmitting more than $10 million worth of bitcoin to a virtual currency exchange based in a sanctioned country. The defendant allegedly executed transactions through an online payments and remittances platform (the “Payments Platform”) operating from a sanctioned country. The platform used a US IP address, presumably to conceal its location. The Payments Platform advertised its services as designed to evade US sanctions, including through alleged untraceable virtual currency transactions. Allegedly, the defendant used a US-based online financial institution, virtual currency exchange, and a foreign-based virtual currency exchange, all unknowingly tied to the “Payment Platform. ”
Ultimately used to transmit over $10 million worth of bitcoins between the US and a sanctioned country, this is a great example of how robust Know Your Business (KYB) controls can assist financial institutions with detecting fraud.