We’re all aware of the fact that unlicensed Bitcoin trading happens. In countries where crypto trading remains a grey area – or is simply illegal – unlicensed trading is often the only way to get a piece of the digital currency market. Now, it appears that in the US at least, police officials are taking a stand against Bitcoin traders that choose to operate outside of the law.
In what appears to be the first case of its kind, a so-called DIY trader based out of Vancouver has found himself being sentenced to 20 days in jail. Louis Ong faced trial in a Seattle U.S. District Court last week, pleading guilty to running an unlicensed money transmission operation. Like many unlicensed traders, he operated a minimal details philosophy with clients in an attempt to distance himself from the illegal operations he was – in many ways – helping to fund.
Covering his tracks
Ong had been running his operation for some time before federal authorities became aware of his activities. Eventually, it was undercover agents that would catch Ong in the act. According to reports, Ong pleaded with clients – unaware that they were federal agents posing as drug dealers – to remain quiet on where the money had come from. He also stressed to others that he didn’t want to know if the funds were being used in the sale of illegal drugs and narcotics, even if it was heavily implied to be the case.
After an agent hinted towards funds being used for the purchase of narcotics, Ong said, “I didn’t hear that.” He explained that he simply didn’t care what the purchased Bitcoin was being used for, “so, there is one thing I tell people, [which] is I don’t really care what they use the bitcoin for. It’s better that I don’t actually know, [because] then I can have plausible deniability.” Ong closed by saying, “I get the job done”, as it was made clear that he was experienced in passing Bitcoin into illicit hands.
Ong will serve a 20-day jail sentence. This on the surface seems like a light punishment, but there was much more to his sentencing than just that. Ong must also hand over a Bitcoin and cash amount worth over $1.1 million to US authorities. In addition, Ong was also given three years of supervised release, while it is unlikely that he will be able to return to the US following the completion of his sentence.
Ong’s sentencing comes after a lengthy pursuit from US Homeland Security. He first appeared on the radar of US officials back in December 2017, as an advertisement offering the anonymous purchase of Bitcoin raised suspicions. Messages would then be exchanged between Ong and undercover agents, prior to a meeting occurring outside a McDonald’s in Tukwila, Washington – where a $12,000 was exchanged for Bitcoin. Ong would use a digital wallet via his iPhone to carry out the transaction, but not before skimming 7.3% off the top as his commission. Agents would track Ong as deposited the cash across various banks.
Taking a hefty cut
Another meeting was arranged between Ong and the agents, this time for a $50,000 exchange. However, Ong raised his commission to 9%, “I am charging higher than a lot of people, but because I get the job done, people come to me,” he said. It wouldn’t be long before Ong became wary of the agent and where the funds where going. He would make repeated references to the “boss”, requesting that those involved stopped talking about drugs and any connection it may have to the agent’s business. Ong said, “I am not interested in what you buy or sell (bitcoin) for, so please do not mention it or have your friends mention it either. Your friends seem to be a bit open about what you do when there is really no need to be.”
Undone by greed
Ong would eventually be confronted by an uninformed agent aware of the operation. This triggered him to register with the US federal agency tasked with battling against money laundering. But, even after making such a bold move, he continued to carry out further transactions with undercover agents, violating the rules and regulations that he had submitted himself too. For Ong, this would prove to be his undoing, as his fragrant rule violations would bring his operation to its knees.
From good causes to criminal intentions
There is very little information available regarding how Ong began Bitcoin trading, but what is known is that he’s been involved in the cryptocurrency community since 2013. In Ong’s defense during the trial, various friends and family members sent letters and character references to the court. Describing Ong’s upbringing, he moved from Singapore to Canada with his mother in 1987. He graduated from the University of B.C. with a computer science degree, while he always carried a desire to “be his own boss.” Surprising many, Ong was actually a volunteer with a number of charities and local churches that help the homeless. Not that this dampens the impact of his crimes, but it does ask some interesting questions of why Ong would engage in such activities.
Is Louis Ong being made an example of? The answer to that question is probably yes, but it does show that US authorities are now taking all forms of crypto crime very seriously.