A California man has been sentenced for his position in utilizing Bitcoin to launder the proceeds of an operation promoting MDMA on the darkish internet.
John Khuu, 29, of San Francisco, California, was sentenced to 87 months in federal jail after pleading responsible to conspiracy to commit cash laundering and conspiracy to function an unlicensed money-transmitting enterprise.
Based on Texas police, Khuu’s operation would import MDMA from Germany and promote it on numerous darkish internet markets, accepting fee in Bitcoin. Khuu would allegedly then commerce the Bitcoin saved in vendor accounts for U.S. foreign money and launder the soiled cash by means of “a whole lot of transactions and dozens of economic accounts.” The person has been indicted individually within the Northern District of California and charged with illegal importation of a Schedule I managed substance.
The person’s arrest got here as a part of Operation Crypto Runner, a joint multiyear investigation by the Division of Justice (DOJ), the U.S. Secret Service (USSS), and the Postal Inspection Service (PIS), introduced again in November 2022.
The operation performed an element in 21 people being arrested in 2022 for appearing as “cash mules” and serving to to launder the proceeds of assorted crypto scams, together with actual property, e-mail, and romance scams. Final month, a Montana man was additionally convicted for crypto cash laundering as a part of the federal company crackdown.
Crypto cash laundering crackdown
It’s no shock that the federal authorities is taking an all-inclusive strategy to combating Bitcoin cash laundering. Blockchain analytics agency Chainalysis thinks 2024 was probably the biggest year ever in terms of money laundered by means of cryptocurrency at over $40 billion, exceeding the earlier document set in 2023.
The agency thinks that the quantity could be greater if this included cash from drug operations, however mentioned it’s more durable to trace the proceeds of crimes that happen “off chain” and originate in the actual world.
A 2024 risk assessment from the U.S. Treasury discovered that although conventional strategies to launder drug cash are nonetheless dominant, utilizing crypto to launder drug cash is rising each in reputation and class.
Many of those crypto drug cash laundering operations are more and more worldwide in scope. The DEA’s most up-to-date National Drug Threat Assessment established how Mexican cartels working within the U.S. have “mutually worthwhile partnerships with China-based cash laundering organizations to launder drug proceeds and are more and more utilizing cryptocurrency.”
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