Bitcoin Trader Convicted of Money Laundering in Arizona

The Bitcoin trader is awaiting sentencing in June after conviction with five counts of money laundering before a jury. He exchanged a total of $165,000 through an online exchange.    

Thomas Mario Costanzo, also known as ‘Morpheus Titania,’ was found guilty this week of five counts of money laundering by a Phoenix federal jury.

Costanzo traded Bitcoin using undercover agents and used it to buy illegal drugs. He was using cryptocurrency to avoid exposure to law enforcement. Furthermore, he failed to disclose details of his transactions.

He failed to identify his customers and exchanged a total of $165,000 in two years from alleged drug traffickers who are undercover federal agents. He failed to operate the online exchange within legal limits.

Costanzo charged anywhere from seven to ten percent commission for peer-to-peer transactions.

Arizona’s Bitcoin laws

Cryptocurrencies and related transactions are legal in Arizona state. However, traders are to observe laws or risk twenty-year prison sentences and quarter-million-dollar fines per conviction.

There is a lot of contention on the need for the Know-Your-Customer (KYC) requirements in cryptocurrencies right now. Some people argue that they can protect customers while others say they are against customer privacy, the same thing that some clients ask for. Regulators and even many people in the crypto industry argue that KYC can help protect customers from unscrupulous exchanges. And even contain money laundering and drug trafficking as well as hacking incidents. From regulators, it is normal to expect some stage-manage hacking incidences to relay the message. But for customers looking for profits, KYC is one of the least concerns.

Additionally, even when the hacker is for even in non-cryptocurrency scenes, the evidence is what requires. And knowing customers via KYC does not necessarily shield them from dealing with illegal exchanges online or from losing their money from unscrupulous traders.

And many regulators are looking for a means to tax cryptocurrencies as assets, so KYC is also desirable for them.

Will KYC help protect customers or is it just another excuse by its promoters? Let’s get connected on  Twitter and Telegram

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David

David Kariuki is a journalist who has a wide range of experience reporting about modern technology solutions including cryptocurrencies. A graduate of Kenya's Moi University, he also writes for Hypergrid Business, Cryptomorrow, and Cleanleap, and has previously worked for Resources Quarterly and Construction Review magazines.

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