The Justice Department is charging an unnamed American citizen with using crypto assets to evade sanctions in what is believed to be the first case of its kind.
According to an opinion written by the federal judge presiding over the case, Zia M. Faruqui, the idea of crypto’s anonymity is a myth, contrary to what some aspiring bad actors may believe.
“Yet like Jason Voorhees the myth of virtual currency’s anonymity refuses to die. See Friday the 13th (Paramount Pictures 1980).
Appearing to rely on this perceived anonymity, Defendant did not hide the Payments Platform’s illegal activity. Defendant proudly stated the Payments Platform could circumvent US sanctions by facilitating payments via Bitcoin.”
The defendant is charged with willfully using Bitcoin (BTC) to evade US sanctions. The defendant allegedly created a virtual payments platform advertising itself as designed to evade sanctions.
Between the payments platform and another exchange account the defendant allegedly used to trade Bitcoin (BTC), the defendant allegedly transferred $10,000,000 in BTC between the United States and an unnamed sanctioned country.
The defendant allegedly violated the International Emergency Economic Powers Act (IEEPA) to defraud the US, which also violates several Office of Foreign Assets Control (OFAC) regulations.
“The question is no longer whether virtual currency is here to stay (i.e., FUD) but instead whether fiat currency regulations will keep pace with frictionless and transparent payments on the blockchain. [The Office of Foreign Assets Control’s] recent guidance confirmed that ‘sanctions compliance obligations apply equally to transactions involving virtual currencies and those involving traditional fiat currencies.’”
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