With regulators scrutinizing centralized exchanges quite strictly, a newer approach to Bitcoin trading seems more than warranted at this stage. It has now come to light that a LocalBitcoins trader has been sentenced to one year in prison for her activities on the aforementioned platform.
Bitcoin Maven Goes to Jail
Trading BTC on LocalBitcoins is not illegal in the United States. It is a perfectly legitimate business model, although there are some caveats users need to take into account at all times. One female trader based in Los Angeles found that out the hard way as she now faces a one-year sentence in a federal prison. Theresa Tetley, also known as Bitcoin Maven, has been operating an unregulated and unlicensed money transmission business involving this platform.
One of the main reasons she got on the governments’ radar is because of her trading activity. Offering vast amounts of Bitcoin for sale on LocalBitcoins is bound to attract a lot of attention and Ms. Tetley now faces a $20,000 fine in this regard. Additionally, she also forfeits $300,000 in cash, 25 gold bars and is required to hand over 40 bitcoin to US state authorities.
An official statement by the DOJ reads:
“As a result of operating this unregistered business, Tetley facilitated laundering for one individual who is suspected of receiving bitcoin from unlawful activity, such as sales of drugs on the dark web. In the course of her business, Tetley also conducted an exchange of bitcoin-for-cash for an undercover agent who represented that his bitcoin were the proceeds of narcotics trafficking.”
This is the first time a LocalBitcoins user faces such charges in the Central District of California. Had Tetley registered with FinCEN to run a money services business, all of these issues could have been avoided completely. It is also worth noting that she never implemented anti-money laundering mechanisms and failed to report certain transactions for suspicious activity. It is believed she exchanged up to $9.5m worth of Bitcoin over the years.
Although it is unfortunate to see a LocalBitcoins user face jail time for selling Bitcoin, the sheer amount of money she was dealing with was bound to raise a lot of questions. Selling any cryptocurrency on a large scale will always require a license, as the non-anonymous nature of BTC makes it easier for law enforcement agencies to crack down on such users.
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