A Washington court has upheld a ruling on a US Department of Justice indictment against a founder of a payment company for transferring digital assets to people from countries under sanctions.
Law enforcement officers suspected an American, whose name was not disclosed, of sending more than $10 million worth of bitcoins to circumvent economic sanctions. This is the first time that the US authorities have made such an accusation in connection with cryptocurrencies.
US Justice of the Peace Zia M. Faruqui of Washington, DC released a statement explaining the decision. The lawsuit stated that the defendant registered a payment company as a front for transferring funds to a country subject to sanctions.
Judge Farooqi alleges that the defendant bought and sold bitcoin using a US-based cryptocurrency exchange that was funded with fiat currency from a US bank account. The defendant then sent the digital currency to foreign crypto exchanges from his office on the trading platform. After that, he transferred the private key to the cryptocurrency wallet to the user of the country under sanctions.
Farooqi, in his statement, expresses concerns about whether the authorities will be able to track illegal transactions with cryptocurrencies:
“Virtual currency is tracked. However, like Jason Voorhees (Friday the 13th protagonist), the myth of virtual currency anonymity does not die.”
The judge referred in his ruling to recent recommendations from the Office of Foreign Assets Control of the Department of the Treasury (OFAC), which in May imposed its first sanctions against cryptocurrency mixer Blender.io for its links to North Korean hackers.
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