A man from Pennsylvania has been sentenced to spending a year and a day in federal prison for selling $1.5 million in Bitcoin to undercover federal agents.
A person selling Bitcoin face-to-face with strangers may worry about being robbed by criminals. Such instances are becoming a bit more common as the acceptance and use of the cryptocurrency continues to go up. A man from Pennsylvania found himself in a tight situation by selling Bitcoin, but he didn’t find himself the target of a criminal assault. Instead, he found himself in legal hot water by selling the virtual currency to undercover federal agents, and now he’s going to jail for it.
Crypto Seller Blues
The Bitcoin seller is Eldon Stone Ross, 24, and he was charged with conducting an unlicensed money transmitting business after being nabbed by federal authorities. Between January 2015 and November 2016, he made bitcoin-to-cash and cash-to-bitcoin transactions and did not report them.
All told, Ross sold $1.5 million of the daddy of cryptocurrencies to undercover federal agents. Back in October 2017, he admitted to selling $50,000 of cryptocurrency to Homeland Security agents.
The prosecution against Ross is something quite new. The assistant US Attorney who prosecuted the seller said, “We don’t see many of these casers. It’s the first I’ve done here.”
Heading to Club Fed
Ross was found guilty and was sentenced to a year and a day in federal prison. After that, he will have to serve three years of supervised release. Ross also has to surrender to the courts the $40,000 he made in commissions.
The reason why Ross got into trouble was that he made no effort to get any identifying information from the undercover agents, not to mention being unlicensed. A point to consider is that financial institutions, including cryptocurrency exchanges like Coinbase, have to report transactions involving more than $10,000 in cash to the Department of the Treasury. This is done to combat extortion, money laundering, aid to terrorists, and other illegal activities.
Not helping Ross with his case was his previous legal woes. He had previously been convicted of trafficking heroin back in 2014 and was sentenced to 23 months in Chester County jail.
You can expect more cases like this to crop up as the federal government increasingly seeks to control and regulate cryptocurrencies. Selling tens of thousands of dollars in Bitcoin on a semi-regular basis without a license or doing due diligence will definitely get the attention of law enforcement. Quite a few states are also looking at cracking down on unlicensed Bitcoin sellers as well.
Do you think Ross was justly or unjustly punished for selling Bitcoin? Did The Man win this round? Let us know in the comments below.
Images courtesy of Pxhere and Bitcoinist archives.