FinCEN Fines P2P Bitcoin Trader for Breaching Banking Secrecy Act

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Another day brings us yet another American Bitcoin trader getting fined for illegal practices. This time around it’s the turn of The United States Financial Crimes Enforcement Network (FinCEN) to bring down the charges on peer-to-peer (P2P) Bitcoin trader Eric Powers. Powers has been ordered to pay a fine of $35,000 for willfully violating the Bank Secrecy Act by failing to register as a money services business. Powers was running his P2P Bitcoin exchange in California and accepted more than $15,000 in cash with a further $5 million worth of Bitcoin changing hands over 160 transactions.

Willfully Violating the Laws

According to Kenneth A. Blanco – FinCEN Director – Powers was well aware of the laws and regulations in place, but chose to willfully violate them. On top of failing to register his P2P Bitcoin trading business, Powers also failed to implement any form of AML and KYC procedures – another big taboo in the United States. Powers advertised his business on the dark web using services such as the Tor Browser to find new clients.

American Traders Under the Microscope

Powers knew his luck was up several months ago, when the US regulators started clamping down on unlicensed crypto trading activities. Last week, Jacob Burrell Campos was sentenced to two years in jail for illegal trading activities on LocalBitcoins – another popular P2P Bitcoin trading platform. Campos then funneled the money to Mexico, where he laundered it and brought it back to the US in cash.

Towards the end of 2018, The US Commodity Futures Trading Commission (CFTC) slapped Joseph Kim with a whopping $1.1 million fine and a 15-month jail sentence for embezzling money from his employer. Compared to these two cases, Powers got off lightly – especially considering his $5 million in Bitcoin transactions

America Cleaning up the Crypto Trading Scene

US regulators are working around the clock to take down all unlicensed Bitcoin traders. The combination of agencies has arrested, fined and imprisoned hundreds of illegal traders, and now the US Securities Exchange Commission (SEC) is working on making regulations easier to meet. The SEC is currently on a road trip of America, stopping off along the way to allow businesses to ask questions and gain insight into how to become fully regulated. This unique approach will certainly go a long way towards helping the American crypto industry become more regulated and secure.

Powers can consider himself a lucky individual as he walks out of court with a $35,000 fine and a permanent ban on running a money service business. The punishment could have been a lot worse, especially when you consider trade volumes and other details of the case. The US is continuing to clean up its crypto trading industry and will continue to do so until it’s free of all illegal trading.