DOJ Charges AurumXchange Operator for Crypto Laundering Linked to Silk Road

Jimmy Aki
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The U.S. Department of Justice (DOJ) has charged Maximiliano Pilipis, operator of AurumXchange, with serious offenses involving crypto laundering and tax evasion. Pilipis’ exchange allegedly processed millions linked to the Silk Road marketplace, adding another case to the DOJ’s list of crypto-related enforcement actions.

Silk Road’s Shadow Looms Over AurumXchange

According to a press release on 28 October, the DOJ alleges that Pilipis facilitated crypto laundering on his platform AurumXchange, processing over $30 million in transactions, including funds tied to the infamous Silk Road.

Silk Road, operated by Ross Ulbricht from 2011 to 2013, was a darknet site where users anonymously bought and sold illegal goods.

The DOJ claims that while Silk Road gained notoriety, Pilipis’ AurumXchange processed transactions from its accounts, which allowed users to launder funds through cryptocurrency exchanges.

From 2009 to 2013, Pilipis reportedly operated without a money transmitter license and avoided essential reporting to federal regulators.

Pilipis allegedly took advantage of this regulatory grey area and, in doing so, enabled vast crypto laundering transactions.

According to authorities, he collected millions in fees, including roughly 10,000 Bitcoin, valued at $1.2 million at the time, for facilitating these unregulated exchanges.

His failure to implement Know Your Customer (KYC) rules further enabled anonymous transactions, allowing Silk Road users to move funds without oversight.

Allegations of Crypto Laundering and Tax Evasion

Authorities also said Pilipis failed to follow federal rules for crypto exchanges. He did not register with the U.S. Treasury Department or report the exchange’s activities to the federal government as required.

In addition to crypto laundering, the DOJ has also charged Pilipis with tax evasion. Authorities claim he failed to report hundreds of thousands of dollars in income from real estate investments he allegedly acquired with profits from AurumXchange.

By converting cryptocurrency into U.S. dollars and purchasing properties in Indiana, he aimed to legitimize the proceeds of his alleged crypto laundering scheme.

The DOJ asserts that Pilipis used crypto laundering techniques to disguise these transactions, structuring his assets to avoid detection. After shutting down AurumXchange, he reportedly moved Bitcoin and other assets to several accounts to “conceal the proceeds of his offenses.”

This evasion of federal tax responsibilities in 2019 and 2020 has led to two counts of tax charges and five counts of crypto laundering.

If convicted, Pilipis could face up to 10 years in prison and a maximum $250,000 fine, pending the judge’s decision based on sentencing guidelines and other statutory factors.

Pilipis’ case shows ongoing concerns about crypto laundering within digital asset exchanges. As part of a broader crackdown on unlicensed crypto activity, the DOJ aims to enforce compliance and deter similar practices.

Digital exchanges increasingly face pressure to adopt regulatory frameworks, and authorities continue to target platforms that do not adhere to KYC and Anti-Money Laundering (AML) policies.

Recall that three investors filed a lawsuit against Binance and former CEO Changpeng Zhao, accusing the exchange of failing to prevent the laundering of stolen crypto on its platform.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.