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U.S. Bitcoin Trader Charged With Operating Unlicensed Money Transmission Venture

A federal grand jury indicted William Green, a resident of New Jersey, for operating unregistered money transmitting enterprise via bitcoin as against the federal law.

According to the press release by the U.S. Department of Justice (DoJ) on Wednesday (July 25, 2017), William Green ran a website which the defendant used to help convert customer’s fiat to bitcoin. Although the case is still under trial, Green could pay a hefty fine and be imprisoned if found guilty.


American Docked For Running Illegal Bitcoin Exchange

Based on the joint investigative effort by special agents of the Internal Revenue Service (IRS) IRS and special agents of the U.S. Immigration and Customs Enforcement Homeland Security Investigations, William Green was found to be operating an unlicensed bitcoin venture, with a website known as “Destination Bitcoin”.

The 46-year-old bitcoin trader from Monmouth County, New Jersey, carried out a business that was a contravention of the federal law. According to federal law, operators of money transmitting services are mandated to register the business with the Secretary of the United States Treasury.

Prior to the indictment, Green, through the website, received money from customers, deposited the funds into his accounts, and later converted the fiat to bitcoin based on the customer’s directive.

Although the release did not state the exact period Green started the unlicensed money transmitting business, the business owner has helped convert more than $2 million in cash to bitcoin for a fee.

Green is currently facing a one-count charge of operating an unlicensed money transmitting venture. The defendant is due in court at a later date.

However, Green is not a first-time offender, as the bitcoin trader was charged with operating an illegal money transmission business in February 2019.

Things could get worse for Green if found guilty, as operating an unlicensed money transmitting venture comes with a maximum penalty of a 5-year jail term and a hefty fine of $250,000.

Green is not the first bitcoin trader to conduct an illegal money transmission business.

According to a Blockonomi report in May 2019, a LocalBitcoins trader carried out illegal and fraudulent activities, in addition to not operating an unlicensed money transmission business. The trader was later sentenced to 21 months in federal prison and ordered to remit profits for the illegal business.

Back in 2018, another LocalBitcoins trader in the United States also ran an illegal money transmitting venture. At the time of the report, the trader pleaded guilty and was likely to face a five-year imprisonment sentence.

Money transmission laws in the US

In the United States, there is no uniform regulation for cryptocurrency. As such, different states resort to developing their own crypto and blockchain laws. With regulatory inconsistency prevalent in the U.S., virtual currency startups have to abide by the rules peculiar to each state.

Trying to determine if cryptocurrency trading should fall under money transmission laws or not is quite impossible at the moment, there is no consensus among states and the major regulatory bodies in the U.S.

Two United States Congressmen sponsored a bill in January 2019, that sought to exempt non-custodial, crypto-based services from money transmission laws. The Financial Crimes Enforcement Network (FinCEN), also introduced new guidance for cryptocurrencies that exempted non-custodial wallets, developers of dApps and DEXes from money transmission laws.

In March 2019, Daniel Hemmert of the Utah Senate sponsored a bill known as the “Blockchain Technology Act”. The bill proposed to exclude blockchain and cryptocurrency business from Utah’s money transmission laws.

Also, the Pennsylvania Department of Banking and Securities (DoBS) released its “Money Transmitter Act Guidance for Virtual Currency Businesses”. Pennsylvania recognizes only fiat or currency issued by the U.S. government as “money”, while cryptocurrency isn’t regarded as money under the Money Transmitter Act (MAT).

However, jurisdictions like New York see cryptocurrency businesses as money transmitters and require that virtual currency platforms obtain a BitLicense to operate in the state.

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