DOJ Charges Crypto Exchange AurumXchange For Laundering Darknet Marketplace Silk Road Funds

The US Department of Justice (DOJ) has charged crypto exchange AurumXchange operator Maximiliano Pilipis with money laundering.

Pilipis allegedly operated the unlicensed exchange and executed transactions worth millions of dollars for Silk Road, a prominent darknet marketplace. Based on the DOJ's charges, he could face up to 10 years imprisonment.

DOJ Indicts AurumXchange Operator For Laundering Funds Connected To Silk Road

In line with a long-lasting investigation,the United States Department of Justice (DOJ) has charged crypto exchange AurumXchange and its founder and operator, Maximiliano Pilipis. It disclosed the information via a press statement released on October 28.

According to the authorities, Pilipis, aged 53, operated AurumXchange, an unlicensed crypto exchange, illegally. The DOJ accused Pilipis of money laundering by executing hundreds of transactions worth over $30 million connected to the darknet marketplace Silk Road.

Pilipis allegedly operated AurumXchange without a license between 2009 and 2013, when the FBI crackdown on the Silk Road.

The darknet marketplace, which operated under the pseudonymous name Dread Pirate Roberts," was overseen by American Ross Ulbricht. It operated on the Tor network between 2011 and 2013, allowing users to trade drugs and other products anonymously.

Meanwhile, AurumXchange also suddenly packed up in 2013 after the closure of the Silk Road. This coincidence sparked the DOJ's suspicions regarding the connection between the two platforms.

Further, the DOJ noted that Pilipis received millions in fees for the illegal transactions he completed. Part of the operator's fees included 10,000 BTC tokens worth over $1.2 million during the period.

Besides failing to register the crypto exchange, the DOJ highlighted that Pilipis failed to comply with Know Your Customer (KYC) requirements. Also, it noted that the operator violated the Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) rules.

DOJ Indicated Zero Tolerance For Illegal Use of Crypto Assets

The agency stated that Pilipis moved all the assets he amassed, including Bitcoin, in bits to conceal their source.In addition, he changed his crypto assets to US dollars and diverted the funds into real estate investments in Arcadia and Noblesville, Indiana.

The authorities alleged that Pilipis accumulated income worth hundreds of thousands of dollars but failed to file a tax return. According to a federal grand jury, Pilipis is charged with five counts of money laundering and two counts of willfully failing to file a tax return.

The DOJ further indicated its zero tolerance for the illegal use of crypto assets, stating that defaulters would face severe consequences.

Zachary A. Myers, US Attorney of the Southern District of Indiana, said: Combatting the criminal misuse of cryptocurrencies and other digital assets is a critical priority for the Department of Justice."

Also, Myers noted that the DOJ is cooperating with other federal law enforcement authorities to investigate and prosecute offenders.

Meanwhile, if found guilty, Pilipis will face up to 10 years in federal prison and a penal fine of about $250,000. A federal district court judge will decide the sentence based on the US Sentencing Guidelines and other related factors.

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