DOJ Charges AurumXchange Operator in Connection with Silk Road Money Laundering Scheme

The U.S. Department of Justice (DOJ) has charged Maximiliano Pilipis, the former operator of cryptocurrency exchange AurumXchange, with money laundering linked to transactions on Silk Road, a notorious darknet marketplace. According to the DOJ’s statement on October 28, Pilipis allegedly processed millions of dollars through AurumXchange between 2009 and 2013, including funds from Silk Road, which operated as an anonymous marketplace for illegal drugs until its shutdown in 2013.

Pilipis, 53, reportedly managed AurumXchange without the necessary licensing, failing to register the exchange with the U.S. Treasury Department or implement required Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols. The DOJ claims that AurumXchange processed over $30 million through 100,000 transactions, including around 10,000 Bitcoin, valued at approximately $1.2 million at the time.

After AurumXchange’s closure, Pilipis allegedly attempted to obscure his earnings by converting his holdings to U.S. dollars and investing in real estate. He is also accused of failing to report income in 2019 and 2020. The federal grand jury has now charged him with five counts of money laundering and two counts of willfully failing to file tax returns, potentially facing up to 10 years in prison and a $250,000 fine if convicted.

Supreme Court Declines Case on Silk Road’s Seized Bitcoin

In related news, the U.S. Supreme Court recently declined to hear a case involving 69,370 Bitcoin seized from Silk Road. Battle Born Investments, which claimed ownership through a bankruptcy estate, argued it had rights to the cryptocurrency, allegedly taken by a debtor who acquired the funds from Silk Road. However, with the Supreme Court’s refusal, the government maintains control over the Bitcoin, valued at $4.38 billion, with plans to potentially sell it.