Bitcoin

Bitcoin Trader Thomas Mario Costanzo Receives 41-Month Sentence

Bitcoin

After a federal jury found him guilty of money laundering, Thomas Mario Costanzo has been sentenced to 41 months of imprisonment by U.S. District Judge G. Murray Snow. But Costanzo, who is also known as Morpheus Titania, will receive credit for the time he has served since his arrest in April of 2017, the Department of Justice said in a press release.

In addition, Snow ruled on the forfeiture of the nearly 81 bitcoins Costanzo provided to an undercover agent in a money laundering transaction then worth $107,000. The Justice Department said the bitcoins are worth more than $600,000 today.

The news comes after Costanzo was convicted of using the cryptocurrency to launder drug money. The evidence at trial stemmed from a 2014 investigation, after Costanzo posted an ad on a peer-to-peer bitcoin exchange website stating that he was willing to engage in cash transactions up to $50,000.

“When undercover federal agents approached Costanzo and told him that they were drug dealers, Costanzo provided them with bitcoin and told them it was a great way to limit their exposure to law enforcement,” a statement released by the Justice Department in March explained.

The statement went on to reveal that, over a two-year period, Costanzo took $164,700 in cash from the agents (believed to be heroin and cocaine traffickers) and exchanged it for bitcoin “in order to conceal and disguise the nature, location, source, ownership, and control of the drug proceeds.”

In addition, Costanzo reportedly used bitcoin to purchase drugs, and he also provided the cryptocurrency to individuals who were buying drugs online. Each of the five convictions carries a maximum penalty of 20 years in prison, a $250,000 fine or both. The bitcoin involved in the final transaction is also subject to forfeiture by the United States.

The case highlights how bitcoin — and other cryptocurrencies — can be used in illegal activities. With that in mind, the Securities and Exchange Commission (SEC) announced in March that there were “potentially unlawful” systems operating that allow the trading of cryptocurrencies, and added that several online trading platforms should be registered with the agency itself.

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