Jacob Burrell-Campos (pictured), a 22 year old coder at Edge Wallet (former Airbitz) from California, has been sentenced to two years in prison by U.S. District Judge Marilyn L. Huff for selling $750,000 worth of bitcoin on Localbitcoin without requiring identification from the buyers.
The then 21 year old was arrested on August 13th 2018 while crossing the border from Mexico and was kept in detention without bail because Magistrates Judge Karen S. Crawford apparently found that Campos had “a disdain and unwillingness to comply with U.S. laws.”
This very young man was apparently threatened with 150 years in prison based on charges of:
1 count of conducting an unlicensed money transmitting business – Five years’ imprisonment and $250,000 fine.
1 count of failure to maintain an anti-money laundering program – 10 years’ imprisonment and $500,000 fine.
28 counts of international money laundering – 20 years’ imprisonment and $500,000 fine for each count.
1 count of conspiracy to structure transactions – 5 years’ imprisonment and $250,000 fine.
He entered a plea bargain in October last year when he admitted to selling the coins without requiring identification and he further admitted to structuring $1 million in increments below $10,000 so as to not trigger reporting requirements.
There is no suggesting this $1 million was ill gotten in the true sense of the word, nor has any money laundering been shown as far as we can see.
Instead it appears Campos legitimately bought the bitcoin from Coinbase and then Bitfinex to then sell them on at Localbitcoin with a 5% mark-up so making a profit of an unclear amount but $823,357 was forfeited.
The main reason for his imprisonment therefore appears to be his failure to require identification, which the government says is a criminal offence as the selling of this $1 million made him a money transmitting business that requires licensing.
Whether that’s actually the case in law was seemingly not challenged in court because he agreed to plead guilty, leaving to the judge thus only the sentencing.
There is no suggestion this young man has any previous criminal history, with it unclear too whether he was aware he had to comply with such identification requirements or at what point he became a money transmitting business; after selling $10,000, $100,000 or when?
The structuring opens him to some punishment, but again there is no suggestion this $1 million was ill-gotten in the true meaning of the word, nor is there quite any evidence to show a disdain for US law.
The two years prison sentence therefore appears to be quite peculiar and perhaps primarily a product of this plea bargain considering this is a first offence that at worst should get a suspended sentence or more appropriately some community service as a warning.
Rather than two years of prison time for selling $1 million worth of bitcoin when banks actually launder hundreds of billions yet not one of them goes to prison for any period of time.