One of the growing risks about cryptocurrencies that concern regulators the most is money laundering. With digital assets gaining popularity and more users, bad actors have also escalated the use of crypto coins like Bitcoin in money laundering because of the encrypted nature of the transactions.
Rossen Iossifov, a 53-year-old resident of Bulgaria and owner of the ‘RG Coins’ crypto exchange, is the latest to be convicted for running a multi-million dollar money-laundering ring and providing this illicit service to an Eastern European cyber fraud syndicate.
Lossifov was found guilty of conspiracy to commit money laundering and conspiracy to commit racketeering after a two-week trial by a federal jury in Frankfort, Kentucky. The accused is to face sentencing on January 12, 2021.
According to the jury, at least 900 U.S. citizens have been defrauded by Lossifov and his Romania based accomplices, who posted false advertisements on popular platforms like Craigslist and eBay for high-value items that actually didn’t exist.
The scammers would then provide victims with forged documents and invoices to make the act look legitimate. They even had a call center and “support staff” to address the concerns of their buyers, the release from the Department of Justice said.
Upon receiving payment, Lossifov would convert the funds into crypto-assets via RG coins and transfer it to offshore money launderers.
The Jury claims that Lossifov knowingly assisted the criminal syndicate from September 2015 until December 2018, and laundered more than $4.9 million worth of Bitcoin.
Lossifov was arrested by U.S. state and federal authorities with the help of the Romanian National Police and the Romanian Agency for Prosecuting Organized Crime.
There is much more to the case than what it seems because Lossifov is the 17th defendant to have been convicted in the case. More than 12 defendants have already been extradited from Romania and three other suspects in the case still remain at large.
Cryptocurrencies and Money Laundering
Criminals continue to use cryptocurrencies like Bitcoin (BTC) as a tool to facilitate money laundering as the tech is still largely unregulated.
One of the most notorious cases involving cryptocurrency exchanges and money laundering is that of the largest Russian-language cryptocurrency exchange BTC-e, which was operational until 2017.
The exchange was behind the laundering of approximately $4 billion in Bitcoin stolen in the infamous Mt. Gox hack, over a term of six years.
Reports have also revealed that the criminals have also been using popular crypto exchanges like Binance and Huobi to launder funds. Data has shown that over a billion dollars worth of illicit cryptocurrency moved through these exchanges last year.
