DOJ charges crypto exchange operator over $30M Silk Road laundering

The U.S. Department of Justice has charged Maximiliano Pilipis, the operator of crypto exchange AurumXchange, with laundering millions connected to the Silk Road darknet marketplace. 

According to an October 28 statement from the DOJ, Pilipis is accused of processing over $30 million in transactions, including funds tied to the notorious Silk Road, which was operated by Ross Ulbricht between 2011 and 2013 under the alias “Dread Pirate Roberts.”

The DOJ alleges that Pilipis ran AurumXchange without a proper license from 2009 to 2013, earning substantial fees, including around 10,000 Bitcoin (CRYPTO:BTC), then valued at $1.2 million. 

Authorities claim that Pilipis violated federal regulations by failing to register the exchange with the U.S. Treasury Department or adhere to Know Your Customer (KYC) requirements, breaching Anti-Money Laundering (AML) and counter-terrorism financing (CTF) rules.

“After AurumXchange shut down, authorities say Pilipis split up and transferred the Bitcoin and other assets he gained from operating AurumXchange to ‘launder and conceal the proceeds of the offenses,’” the DOJ stated. 

The department also accuses Pilipis of converting the laundered crypto into U.S. dollars, which he allegedly used to purchase real estate properties in Arcadia and Noblesville, Indiana.

The indictment against Pilipis includes five counts of money laundering and two counts of willfully failing to file a tax return. 

Authorities claim he earned hundreds of thousands of dollars in income from these activities in 2019 and 2020 but did not file taxes for those years.

If found guilty, Pilipis could face up to ten years in prison and a fine of $250,000. 

However, a federal district court judge will ultimately determine his sentence based on statutory factors and sentencing guidelines, which could lead to a different outcome.