- AurumXchange founder Maximiliano Pilipis indicted for alleged unlicensed crypto operations and money laundering.
- Federal charges claim AurumXchange processed over 100,000 transactions, some linked to Silk Road’s illicit activities.
- Facing prison time, Pilipis’s case underscores rising regulatory focus on unlicensed cryptocurrency exchanges.
Crypto exchange operator Maximiliano Pilipis, 53, a former resident of Noblesville, Indiana, has been charged with money laundering and tax evasion. The charges are connected with the unlicensed business of AurumXchange, a virtual currency exchange. Pilipis was charged in the superseding indictment with five counts of money laundering and two counts of willful failure to file tax returns by a federal grand jury. The indictment shows how the regulators are turning the heat on unlicensed cryptocurrency exchanges and how non-compliance is a financial risk.
According to a recent report, Pilipis founded AurumXchange in 2009 which enables trading of Bitcoin and other cryptocurrencies for USD and other international currencies. AurumXchange, operating in the market, was said to have done over 100,000 business deals and held over 10,000 Bitcoins, valued at $1.2 million at that time.
Crypto Regulations And Compliance
However, federal law requires that money transmission businesses must register with the U.S. Treasury Department, obtain information about the customer and follow the anti-money laundering procedures.
Some of the transactions conducted through AurumXchange are said to have involved accounts linked to Silk Road, a black market website through which federal authorities said they put an end to in 2013. Prosecutors further allege that Pilipis stopped the operation of AurumXchange in the same year that Silk Road was shutdown.
According to the indictment, after closing AurumXchange, Pilipis allegedly transferred and divided the obtained Bitcoin to avoid being caught by the authorities. By 2018, he had begun the process of liquidating these assets and purchased properties in the United States dolars to invest in real estate in Arcadia and Noblesville, Indiana. Police also claim that he made a lot of income in 2019 and 2020 but never filed tax returns which is against the federal tax laws.
DOJ On Crypto Misuse
U.S. Attorney Zachary A. Myers pointed to the growing Justice Department’s interest in prosecuting the misapplication of digital currencies. He stated:
“Together with our partners in federal law enforcement, we will continue to work to investigate and prosecute offenders who exploit digital assets to fuel drug trafficking and other offenses, and those who unlawfully facilitate the transfer and laundering of the proceeds of crime.”
Pilipis could be jailed for up to ten years and be fined $250,000 in case he is convicted. The United States Sentencing Guidelines and all other statutory factors will be presented to a federal judge for them to determine the appropriate sentence. This case shows the relevance of the regulation in the processes of the cryptocurrency industry as the sphere of digital finance is developing.
