The U.S. Department of Justice (DOJ) has charged Maximiliano Pilipis, the operator of the cryptocurrency exchange AurumXchange, with several offenses, including money laundering associated with the notorious Silk Road marketplace. According to authorities, the unregulated exchange handled more than $30 million in transactions, some of which had ties to Silk Road, a dark web site that is notorious for enabling illicit operations, such as the sale of drugs.
The DOJ claims that Pilipis ran AurumXchange from 2009 to 2013, handling over 100,000 transactions. He allegedly earned large fees from these transactions during this time, accumulating about 10,000 Bitcoin, which was then worth $1.2 million. The DOJ alleges that some of this money came from Silk Road-affiliated accounts, further linking the exchange to the operations of the dark web bazaar.
Ross Ulbricht founded Silk Road, an anonymous marketplace that ran on the Tor network between 2011 and 2013 under the alias “Dread Pirate Roberts.” The platform’s reputation as a hub for illicit trading led to Ulbricht’s arrest and the FBI’s closure.
According to allegations, Pilipis operated AurumXchange without the requisite license and ignored federal laws requiring him to register with the US Treasury Department. He also allegedly disregarded Know Your Customer (KYC) procedures and other anti-money laundering (AML) and counter-terrorism financing (CTF) regulations. The indictment accuses Pilipis of omitting taxes for 2019 and 2020, in addition to failing to record revenue from his holdings. He is currently facing two counts of willfully neglecting to file a tax return and five counts of money laundering. Pilipis faces a fine of $250,000 and a maximum term of 10 years in jail if convicted. A federal district court judge will decide his final punishment based on the statute and other considerations
