California man was declared for using bitcoin to wash the profits of dark web MDMA

A California man was declared his role in use Bitcoin To wash the revenue of operations selling MDMA on the dark web.

John Coo, 29, of San Francisco, California, was sentenced to 87 months in federal prison after pleading guilty to commit money laundering and conspiracy to run a business that communicates unlicensed money.

According to Texas police, Khuu’s business imports MDMA from Germany, sells it in various dark web markets, and accepts payments in Bitcoin. Khuu is said to later exchange Bitcoin stored in his merchant account for US currency and wash dirty money through “hundreds of transactions and dozens of financial accounts.” The man was charged separately in the Northern District of California and was responsible for the illegal import of Schedule I controlled substances.

The man’s arrest was born in Operation Crypto Runner, a joint multiyear investigation by the Department of Justice (DOJ), US Secret Service (USSS), and the Postal Inspection Office (PIS), announced in November 2022.

The operation acted as a “money mule” in 2022 and helped wash the proceeds of various crypto frauds, including real estate, email and romance scams. 21 people were arrested. Last month, a Montana man was also convicted of crypto money laundering as part of a federal agency crackdown.

Cryptocurrency Money Laundering

It’s no surprise that the federal government is taking a comprehensive approach to fighting Bitcoin money laundering. Blockchain analytics company Chain Orisis believes 2024 is likely the biggest year ever, with over $400 billion in money laundered through cryptocurrency, surpassing previous records in 2023.

The company believes that if this includes money from its drug business, the number will be high, but it says it is difficult to track the revenues of crimes that originate from the real world, “outside of the chain.”

A 2024 risk assessment from the US Treasury Department found that while traditional methods of washing drug money remain dominant, using Crypto to wash drug money is increasing in both popularity and refinement.

Many of these Crypto Drug money laundering businesses are increasingly reaching international reach. DEA’s recent national drug threat assessment established that the US-operated Mexican cartel “washing drug revenues and increasingly using cryptocurrency as it has mutually profitable partnerships with China-based money laundering organizations.”