Originally published on: October 29, 2024
The operator of AurumXchange, a cryptocurrency exchange, has been charged by the United States Department of Justice for money laundering activities linked to the infamous darknet marketplace, Silk Road.
According to the DOJ’s statement on Oct. 28, Maximiliano Pilipis, who is 53 years old, allegedly processed over $30 million through AurumXchange in more than 100,000 transactions. Some of these funds were traced back to accounts associated with Silk Road, the illicit online marketplace.
Silk Road, run by the pseudonymous “Dread Pirate Roberts” Ross Ulbricht, operated on the Tor network from 2011 to 2013. The platform enabled anonymous buying and selling of various products, particularly attracting drug dealers.
Pilipis reportedly ran AurumXchange without a license between 2009 and 2013, coinciding with the FBI’s shutdown of Silk Road in the same year. The DOJ claims that he collected substantial fees, including 10,000 Bitcoin, worth around $1.2 million at the time, for facilitating these illicit transactions.
In addition to money laundering charges, Pilipis is accused of neglecting federal registration and reporting requirements for crypto exchanges. He allegedly failed to register with the US Treasury Department and comply with Anti-Money Laundering (AML) and counter-terrorism financing (CTF) regulations by ignoring Know Your Customer (KYC) rules.
Following the closure of AurumXchange, Pilipis is said to have transferred and divided his assets to conceal the proceeds of his crimes. He converted the cryptocurrency into US dollars, using them for real estate investments in Arcadia and Noblesville, Indiana.
Authorities claim that Pilipis failed to disclose this income, which amounted to hundreds of thousands of dollars in 2019 and 2020, by not filing tax returns. He now faces five counts of money laundering and two counts of willfully failing to file a tax return as per a superseding indictment by a federal grand jury.
If convicted, Pilipis could be sentenced to up to 10 years in prison and fined up to $250,000. The final decision on his fate will rest with a federal district court judge, who will consider sentencing guidelines and other statutory factors when determining his punishment.
