Originally published on: October 29, 2024
The United States Department of Justice made headlines by charging the operator of AurumXchange, a crypto exchange, with money laundering. Allegations suggest that over $30 million in funds from 100,000 transactions flowed through the exchange, with some coming from accounts linked to the infamous darknet marketplace, Silk Road.
Operating under the pseudonym “Dread Pirate Roberts,” Ross Ulbricht managed the Silk Road marketplace on the Tor network from 2011 to 2013. This platform enabled anonymous buying and selling, making it a hotspot for thousands of drug dealers.
Maximiliano Pilipis, the accused operator of AurumXchange, allegedly ran the exchange without proper licensing from 2009 to 2013 when the FBI shut down Silk Road. Pilipis is said to have collected hefty fees, including 10,000 Bitcoin, worth around $1.2 million at the time, for facilitating these illicit transactions.
Authorities claim that Pilipis neglected to fulfill federal registration and reporting requirements for crypto exchanges, failing to register with the US Treasury Department and failing to report the exchange’s activities to the government. Moreover, he allegedly bypassed KYC rules, violating AML and CTF regulations.
After the shutdown of AurumXchange, Pilipis reportedly tried to launder and conceal his assets by converting his crypto into US dollars for real estate investments in Arcadia and Noblesville, Indiana. Despite generating significant income in 2019 and 2020, Pilipis failed to file a tax return.
A grand jury indicted Pilipis on five counts of money laundering and two counts of willfully failing to file a tax return. If convicted, he faces up to 10 years in prison and a fine of up to $250,000.
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