US Files Sentencing Position in Unlicensed Crypto Money Transmission Case

News | May 21, 2024 By:

On Monday, May 6, 2024, the United States government filed its sentencing position in the case of Hayk Martirosyan, who was involved in an unlicensed money-transmitting business that dealt with cryptocurrency exchanges.

Martirosyan worked with co-defendant Samvel Grigoryan operating a financial exchange through the website beginning in an unspecified date until September 2023. Neither Martirosyan nor Grigoryan were properly licensed as required under California and federal law to conduct money transmission services for the public. They would meet customers in Los Angeles County to trade cryptocurrency for cash or vice versa and charge a fee for these services.

Martirosyan’s role was to transport the cash to and from customers, count the money, and assist in financial exchanges. Grigoryan controlled the cryptocurrency wallet and executed the trades of digital coins like Bitcoin for fiat currency. In August 2023, they conducted two exchanges totaling $100,000 as part of their unlicensed money-transmitting operation.

The United States Probation Office originally calculated Martirosyan’s base offense level as six under sentencing guidelines, which was increased by eight levels for transaction amounts exceeding $95,000. An additional two-level enhancement was included for believing the money involved was linked to drug proceeds. However, the government agreed with Martirosyan that there was no evidence he knew the cash’s origin, so this enhancement should not apply. With adjustments for accepting responsibility and being a zero-point offender, the government and defense determined Martirosyan’s final offense level was ten.

Based on these guideline computations, the recommended sentencing range was 6–12 months in prison. The United States Attorney’s office argued a low-end sentence of six months incarceration followed by one year of supervised release was appropriate. They acknowledged Martirosyan played a reduced role by not controlling the cryptocurrency accounts and taking direction from Grigoryan. However, the government also noted Martirosyan came to the U.S. specifically for this criminal money transmission scheme.

After assessing the nature of the offense and Martirosyan’s background, the prosecution believed a six-month sentence was sufficient based on the circumstances while avoiding unwanted disparities.

Please contact BlockTribune for access to a copy of this filing.