FinCEN assessed a $60 million penalty against an operator of two convertible virtual currency exchangers (called "mixers" or "tumblers") for violations of the Bank Secrecy Act's registration, program, and reporting requirements.
As described in the assessment, the operator conducted each of his businesses as an unlicensed money services business. FinCEN found that the operator's businesses were designed to conceal the sources or owners of transmitted bitcoins and that the operator did not implement an Anti-Money laundering ("AML") program or file suspicious activity reports ("SARs") on any of the transactions, including those conducted on "darknet" marketplaces for child pornography, illegal drugs, and stolen personally identifiable information.
FinCEN determined that the operator's failure to implement an AML program and file SARs enabled numerous illegal transactions. As a result, FinCEN determined that the operator violated 18 USC 1956 ("Laundering of monetary instruments") and 18 USC 1960 ("Prohibition of unlicensed money transmitting businesses") and assessed a civil money penalty of $60 million.
In a parallel action, the DOJ charged the operator with (i) money laundering conspiracy, (ii) operating as an unlicensed money transmitting business, and (iii) transmitting money without a D.C. license in an indictment filed in the U.S. District Court for the District of Columbia.
Commentary Christian Larson
Some people still seem to think that bitcoin transactions are anonymous. They are not. Bitcoin transactions are recorded and publicly available for all to examine on the distributed ledger. FinCEN's assessment is notable because it lists 33 specific instances in which FinCEN observed bitcoin transactions between one of the penalized bitcoin "mixers" and specific "darknet" marketplaces or other "mixers."
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