The United States Department of Justice may move forward on a criminal prosecution case against a U.S. citizen who allegedly violated sanctions through cryptocurrency.
According to a Friday opinion filing in U.S. District Court for the District of Columbia, the unnamed individual who is the subject of a criminal investigation by the Justice Department allegedly sent more than $10 million in Bitcoin (BTC) from a U.S.-based crypto exchange to an exchange in a country for which the U.S. currently imposes sanctions — suggesting Russia, Cuba, North Korea, Syria, or Iran. The filing alleged the individual “conspired to violate the International Emergency Economic Powers Act” and conspired to defraud the United States.
The individual allegedly “proudly stated the Payments Platform could circumvent U.S. sanctions” using BTC and knew about sanctions on the country. According to the filing, the U.S.-based crypto exchange had the user’s information through Know Your Customer compliance policies.
“The Department of Justice can and will criminally prosecute individuals and entities for failure to comply with [Office of Foreign Assets Control]’s regulations, including as to virtual currency,” said Magistrate Judge Zia Faruqui in his opinion. “Prohibited financial services include any transfer of funds, directly or indirectly […] from the U.S. or by a U.S. person/entity, wherever located, to the sanctioned entity/country. And lest there be any doubt, financial service providers include virtual currency exchanges.”
“The question is no longer whether…