The owner of the crypto trading platform AurumXchange, Maximiliano Pilipis, has been indicted by American authorities for allegedly funneling funds connected to the notorious Silk Road marketplace. The United States Department of Justice stated that Pilipis, a 53-year-old resident of Indiana, assisted in facilitating over $30 million between 2009 and 2013, with a portion of the funds originating from Silk Road accounts. Silk Road, which was the first darknet marketplace, operated as an online black market and was shut down by the FBI in 2013. Its founder, Ross Ulbricht, is currently serving a life sentence for various charges including money laundering and drug distribution.
AurumXchange, which the DOJ claims operated without a license, conducted over 100,000 transactions. During its approximately four years of operation, Pilipis managed to accumulate more than 10,000 Bitcoin in fees, equivalent to around $1.2 million based on Bitcoin prices at the time.
According to a previous report, the exchange was registered in Dominica and operated under the name Aurum Capital Holding, which worked as a money-transmitting business. The funds obtained from the operation were split across multiple wallet addresses in order to “launder and conceal” the proceeds, with some transactions directed towards darknet marketplaces. Additionally, a portion of the funds was used for real estate investments in Arcadia and Noblesville, Indiana, and the profits generated from these investments were not reported on a tax return.
In January 2024, the criminal investigative branch of the Internal Revenue seized nearly $10 million from Morgan Stanley accounts controlled by Pilipis, claiming that he was aware that the property involved in the transactions represented the proceeds of unlawful activity. Subsequently, in the same month, a federal grand jury indicted Pilipis on one count of money laundering. Following an expanded investigation by the DOJ, the grand jury recently issued a superseding indictment, adding five more counts of money laundering and two counts of willfully failing to file a tax return.
If convicted, Pilipis could face a prison sentence of up to 10 years and fines of up to $250,000.
The involvement of cryptocurrency exchanges in money laundering activities has attracted significant attention worldwide. Swedish authorities recently referred to certain exchanges as “professional money launderers” due to their facilitation of such activities. Regulatory authorities have also intensified their efforts to combat illicit fund flows through these platforms. Several major crypto exchanges, including Binance, KuCoin, OKEx, and BitMEX, have faced accusations or investigations related to money laundering over the years.
In a recent development, the Federal Criminal Police Office in Germany and the Central Office for Combating Internet Crime shut down 47 crypto exchanges for allowing transactions without implementing proper anti-money laundering measures.