The US Department of Justice (DOJ) recently charged Maximiliano Pilipis with operating an unlicensed cryptocurrency exchange and laundering proceeds allegedly linked to the Silk Road dark web marketplace. Silk Road, once infamous for anonymous, illicit transactions, was dismantled by US authorities in 2013, while its creator, Ross Ulbricht, is serving a life sentence for various offences, including facilitating illegal drug sales.
Charges of Money Laundering and Tax Evasion
The DOJ announced on Monday that Maximiliano Pilipis, a 53-year-old former operator of the AurumXchange cryptocurrency platform, faces five counts of money laundering and two counts of willful failure to file a tax return. If convicted, he could face up to 10 years in prison and a fine of up to $250,000.
AurumXchange was active from 2009 to 2013, offering Bitcoin and other cryptocurrency exchanges to US dollars without the required licensing. During its operation, AurumXchange processed more than 100,000 transactions, facilitating the movement of approximately $30 million. Court records reveal that some of these funds reportedly originated from Silk Road transactions.
The DOJ revealed that US law enforcement had seized over 50,676 Bitcoin connected to Silk Road in November 2021, worth $3.4 billion at the time. Since Silk Road’s shutdown in 2013, US authorities have made strides in investigating and prosecuting Silk Road-linked financial networks, leading to these recent charges against Pilipis.
10,000 BTC in Transaction Fees
Prosecutors state that Pilipis closed AurumXchange the same year Silk Road was shut down, collecting over 10,000 Bitcoin in fees throughout the platform’s active years. While the amount was worth roughly $1.2 million at the time, today it would be valued at around $709.2 million.
The DOJ claims that Pilipis took steps to obscure his gains, splitting and laundering Bitcoins. Around 2018, he reportedly started converting these funds into US dollars. Court documents allege that he used these laundered funds to purchase various properties.
Tax Evasion Allegations
Alongside the charges of unlicensed exchange operation and money laundering, Pilipis is also accused of tax evasion. Despite reportedly earning hundreds of thousands of dollars from his cryptocurrency activities in 2019 and 2020, he allegedly failed to file any income tax returns, violating federal law.
US Attorney for the Southern District of Indiana, Zachary Myers, emphasized that law enforcement is committed to prosecuting those who exploit digital assets for criminal activities. “Together with our partners in federal law enforcement,” Myers stated, “we will continue to work to investigate and prosecute offenders who exploit digital assets to fuel drug trafficking and other offences, and those who unlawfully facilitate the transfer and laundering of crime proceeds.”
This case underscores the ongoing DOJ efforts to address the illegal use of cryptocurrencies and strengthen compliance within the crypto industry.