On October 18, the Federal Bureau of Investigation (FBI) filed charges against six individuals for allegedly operating an unlicensed money-transmitting business involving $30 million in cryptocurrencies.
These charges, disclosed through court documents filed in the Southern District of New York, claim that the defendants engaged in exchanging Bitcoin and other digital currencies for cash on the darknet, all without the necessary license required by the State of New York for money transmission.
The unsealed affidavit of the FBI agent revealed that the accused conducted their operation between July 2021 and September 2023, and the names of the people included in the charges are Shaileshkumar Goyani, Brijeshkumar Patel, Hirenkumar Patel, Naineshkumar Patel, Nileshkumar Patel, and Raju Patel. However, Naineshkumar Patel was granted a conditional release.
One of the most concerning aspects of this case is the alleged involvement in money laundering and connections to illegal activities.
According to the document, an unidentified co-conspirator informed an undercover officer that their cryptocurrency-to-cash exchange had made about $30 million in the last three years.
The co-conspirator also disclosed that some clients were involved in illegal activities, such as drug trafficking, with the wealthiest clients identified as hackers.
On February 7 2023, law enforcement officers arrested a person responsible for mailing parcels of cash on behalf of the unidentified co-conspirator.
However, the individual, who was reported to have been operating from a post office in Westchester County, NY, later cooperated with the FBI, which led to further discoveries on the case.
The filing revealed that the source was involved in approximately 80 controlled cash pick-ups totalling $15 million over the course of eight months.
Photographic and video surveillance evidence presented in the filing confirms that none of the accused were operating with a licensed money-transmitting business, which is a requirement in New York.
The incidents underscore the rising rate of cybercrime and crypto-related hacks in the cryptocurrency industry.
Recently, the FBI arrested Roman Semenov, CEO of Tornado Cash, and also sanctioned the co-founder for involvement in money laundering, operating an unlicensed money-transmitting business, and violating an offence.
However, the U.S. Department of Justice (DOJ) has pressed charges against Roman, while the Co-founder Roman Storm remains missing.