Crypto Exchange Operator Charged with Money Laundering

DOJ Charges AurumXchange Operator

The United States Department of Justice has charged Maximiliano Pilipis, the operator of crypto exchange AurumXchange, with money laundering. The DOJ alleges that the exchange processed over $30 million in funds, some of which were linked to the notorious darknet marketplace, Silk Road.

Silk Road's Dark Legacy

Silk Road, run by Ross Ulbricht under the pseudonym "Dread Pirate Roberts," operated on the Tor network from 2011 to 2013. It provided a platform for anonymous transactions, becoming a hub for drug deals. The FBI shut down Silk Road in 2013, the same year Pilipis is alleged to have operated AurumXchange without a license.

Unlicensed Operations and Regulatory Violations

Pilipis is accused of running his exchange without proper licensing from 2009 to 2013. He allegedly facilitated transactions that resulted in millions in fees, including 10,000 Bitcoin, valued at $1.2 million at the time. The DOJ claims Pilipis neglected federal registration and reporting requirements, failing to register with the US Treasury Department and not implementing Know Your Customer (KYC) protocols, violating Anti-Money Laundering (AML) and counter-terrorism financing regulations.

Concealment and Asset Transfers

After AurumXchange's closure, Pilipis is said to have transferred Bitcoin and other assets to conceal the illicit proceeds. These assets were reportedly converted into US dollars and invested in real estate in Arcadia and Noblesville, Indiana. One of his properties is now reportedly bank-owned.

Legal Consequences

A federal grand jury has indicted Pilipis on multiple counts, including money laundering and failing to file tax returns. If convicted, he faces up to ten years in prison and a $250,000 fine. However, the final sentence will depend on the court's discretion and statutory guidelines.