Bitcoin Trader Faces 30 Months In Jail For Illegal Money Transmission

Crime, News | June 12, 2018 By:

A Los Angeles woman is facing up to 30 months in prison for allegedly running an illegal money transmitting business that exchanged bitcoin for cash.

According to the US Attorney’s Office, Theresa Tetley, 50, who called herself the “Bitcoin Maven,” made at least $300,000 a year from trading bitcoin on Localbitcoins.com, with a transaction volume of $6 million to $9.5 million between 2014 and 2017.

Tetley previously pleaded guilty in downtown Los Angeles to federal charges of having operated a money transmission business that failed to comply with federal registration requirements and that she conducted a financial transaction worth $80,000 involving proceeds of drug trafficking.

Federal prosecutors have asked US District Judge Manuel Real to sentence Tetley to 30 months in federal prison, while Tetley’s defense attorney is pushing for a lesser sentence of one year. Prosecutors have also asked for the forfeiture of 40 bitcoin ($270,000), $292,264 in cash and 25 assorted gold bars seized by law enforcement on March 30 of this year.

LocalBitcoins facilitates over-the-counter trading of local currency for bitcoins. The platform operated anonymously without any regulations and no know your customer (KYC) was required to buy and sell on the site. This has led to trouble for traders who’ve done a large volume of transactions without reporting to the necessary government agencies.

Tetley is one of many instances where Localbitcoins traders have been taken into custody for illegal money transmission. In May 2017, Michael Lord allegedly used LocalBitcoins to do over 3,000 transactions associated with money laundering. At the time, prosecutors alleged that Lord used a series of personal and business bank accounts as part of an effort to obscure their bitcoin exchanging. Lord was charged with operating an unlicensed money transmitting business and money laundering.

In December 2017, a police task force in India busted a gang targeting local people interested in trading bitcoin. The criminals allegedly created multiple accounts on Localbitcoins and offered to sell bitcoin in exchange for money sent via a bank transfer.