14.04.2021

Silk Road Seller Pleads Guilty to Money Laundering $19 Million With Bitcoin

Prosecutors with the Southern District of New York announced a plea deal with Hugh Brian Haney on Thursday, adding another postscript to the infamous dark web marketplace’s history. According to a press release, Haney was accused of laundering close to $20 million using bitcoin in early 2018.

A former narcotics trafficker pled guilty to charges that he laundered $19 million in profit through Silk Road.

Silk Road was among the dark web’s earliest drug marketplaces and a haven for its bitcoin-accepting vendors until its operator, Ross Ulbricht, was arrested in October 2013 and the site was shut down. Ulbricht is currently serving a life sentence on charges of narcotics distribution, computer hacking and conspiracy.

Haney was one of the sellers who used the marketplace. According to the prosecutors, Haney was a “high-ranking member” of a narcotics outfit known as Pharmville, and is said to have received nearly 4,000 bitcoin from Silk Road-linked accounts through February 2012. According to the complaint, he trafficked in fentanyl, oxycontin and other narcotic sales.

“Hugh Haney used Silk Road as a means to sell drugs to people all over the world”, U.S. Attorney Geoffrey S. Berman said in a statement. “Then he laundered more than $19 million in profits through cryptocurrency.”

He was caught after liquidating his remaining bitcoins on an exchange for $19,147,053 in January and February 2018. The unnamed company froze his account and launched an internal investigation that ultimately led to a search warrant. Haney was arrested in July 2019.

Initially, Haney claimed his bitcoin came from a mining operation. But investigators used “blockchain analysis software” to show the funds came from Silk Road, according to the July complaint.

According to his plea deal, Haney pled guilty to one count of concealing money laundering and one count of engaging in a financial transaction in criminally derived property. He is set to be sentenced in February 2020.

Bitcoin News Summary – May 27, 2019

Facebook is said to be finalising plans to launch its own cryptocurrency next year. testing of the cryptocurrency, referred to internally as GlobalCoin, will start by the end of this year. Facebook is expected to outline plans in more detail this summer, and has already spoken to Bank of England governor Mark Carney.

Europol and the Dutch Criminal Investigation Service took down the 6 servers hosting the Bestmixer.io coin tumbling service. Supposedly the first such policing action against a tumbler by law enforcement, it is alleged that the tumbler was aiding in money laundering. The tumbler was one of the 3 largest, and handled Bitcoin, Litecoin, and BCH.

The Coinstar service which is running a trial to allow customers in various grocery stores to purchase Bitcoin has now expanded to cover 21 American states. There are now over 2,200 such kiosks available to Americans in high traffic retail locations.

Crypto podcaster Guy Swann reported that the Bitcoin Cash blockchain had been reorganized by two mining pools working together to achieve hashrate dominance. While details remain sketchy at this time, it’s clear that the miners reorganized 2 blocks to reverse a theft of coins which occurred around the latest Bitcoin Cash fork.

And finally, US telecoms giant, AT&T announced that they will now accept Bitcoin for payment of mobile bills. AT&T is the first US mobile carrier to accept crypto.

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