DOJ Charges AurumXchange Operator with Money Laundering Linked to Silk Road

The U.S. Department of Justice (DOJ) has filed charges against Maximiliano Pilipis, operator of the cryptocurrency exchange AurumXchange, for alleged money laundering related to Silk Road transactions.

According to a statement from the DOJ yesterday, Pilipis is accused of managing millions of dollars in cryptocurrency transactions through AurumXchange. Reports link some of the funds to accounts associated with Silk Road, the notorious darknet marketplace known for illegal activities, including drug trafficking.

The DOJ states that Pilipis, 53, operated AurumXchange without licensing from 2009 to 2013. During that period, the DOJ estimates that the exchange processed over $30 million across approximately 100,000 transactions. This includes transactions involving around 10,000 Bitcoin, valued at about $1.2 million back then.

The DOJ suspects that funds flowing through AurumXchange originated from Silk Road, which authorities dismantled in 2013.

“Pilipis allegedly processed substantial funds through AurumXchange without adhering to essential federal regulations,” the DOJ statement reads.

In addition, the agency alleges that Pilipis neglected to register his business with the U.S. Treasury Department, a requirement for cryptocurrency exchanges under federal law. It also asserts that Pilipis did not implement Know Your Customer (KYC) protocols, which is in violation of Anti-Money Laundering (AML) and counter-terrorism financing (CTF) laws.

After AurumXchange ceased operations, authorities claimed Pilipis attempted to conceal his gains by converting cryptocurrency into U.S. dollars and investing the proceeds. This reportedly included purchasing real estate properties in Arcadia and Noblesville, Indiana. Additionally, although Pilipis generated significant income from his investments in 2019 and 2020, he reportedly failed to file tax returns for those years. This resulted in additional charges.

The federal grand jury has charged Pilipis with five counts of money laundering and two counts of willfully failing to file tax returns. If convicted, he faces up to 10 years in prison and a fine of up to $250,000.

United States Attorney Zachary A. Myers for the Southern District of Indiana commented, “Combating the criminal abuse of cryptocurrencies and other digital assets is a fundamental priority for the Department of Justice.” Myers added that federal law enforcement partners are committed to investigating and prosecuting individuals who exploit digital assets for illegal purposes.

In related news, the U.S. Supreme Court recently declined to hear a case involving 69,370 Bitcoin seized from Silk Road, valued at approximately $4.38 billion. Battle Born Investments, a firm claiming ownership of Bitcoin through a bankruptcy estate, sought review but was denied. The decision leaves the government in control of the assets, as lower courts consistently ruled against Battle Born’s claims.

Lawrence does not hold any crypto asset. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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